Intermediate Accounting (2nd Edition)
2nd Edition
ISBN: 9780134730370
Author: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
Publisher: PEARSON
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Textbook Question
Chapter 5, Problem 5.4P
Statement of Net Income Presentation. IFRS. Cardinal Manufacturing, Ltd., an IFRS reporter, provided the following information from its current-year
Cardinal Manufacturing, Ltd.
Trial Balance (Partial)
For the Current Year Ended
| Account | Debit | Credit |
| Common Stock (no par)— Beginning Balance | $3,876,000 | |
| Retained Earnings—Beginning Balance | 2,720,000 | |
| Accumulated Other Comprehensive Income—Beginning Balance Dividends | $58,500 | 85,675 |
| Sales | 2,500,000 | |
| Interest Income | 4,500 | |
| Income from Share of Associates | 75,000 | |
| Gain on Disposal of Plant Assets | 100,500 | |
| Gem on Flood Damage—Before Tax | 56,000 | |
| Unrealized Gain on Available-for-Sale Bonds | 45,600 | |
| Cost of Goods Sold | 900,000 | |
| Selling Expenses | 20,000 | |
| Office Supplies Expense | 123,500 | |
| Sales Salaries Expense | 145,000 | |
| Advertising Expense | 68,900 | |
| Office Salaries Expense | 78,500 | |
| Systems Consulting Fees—General | 44,550 | |
| Depreciation Expanse—General | 130,000 | |
| Interest Expense | 98,750 | |
| Loss on Asset Impairment | 9,350 | |
| Loss on Discontinued Operations—Before Tax | 140,000 |
Required
Prepare a statement of net income and additional disclosure that would meet IFRS presentation requirements indicate items IFRS requires to be reported on the income statement The tax rate is 40%.
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Selected current year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts
at December 31 of the prior year were Inventory. $55,900: total assets. $199.400: common stock. $86.000: and retained earnings.
$30,037.)
Assets
Cash
Short-term investments
Accounts receivable, net
Merchandise inventory
Prepaid expenses
Plant assets, net
Total assets
CABOT CORPORATION
Income Statement
CABOT CORPORATION
Balance Sheet
December 31 of current year
Liabilities and Equity
$ 8,000
Accounts payable
8,800
Accrued wages payable
30,200
Income taxes payable
30,150
Long-term note payable, secured by mortgage on plant assets
2,500
151,300
Common stock
Retained earnings
$ 230,950
Total liabilities and equity
$16,500
3,400
2,800
63,400
86,000
58,850
$ 230,950
For Current Year Ended December 31
Sales
Cost of goods sold
Gross profit
Operating expenses
Interest expense
Income before taxes
Income tax expense
Net incone
Required:
$ 448,600
297,250
151,350…
Selected current year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts
at December 31 of the prior year were inventory, $50,900; total assets, $199,400; common stock, $81,000; and retained earnings,
$48,724.)
CABOT CORPORATION
Balance Sheet
December 31 of current year
Liabilities and Equity
Assets
Cash
Short-term investments
Accounts receivable, net
Merchandise inventory
Prepaid expenses
Plant assets, net
$ 16,000 Accounts payable
8,200 Accrued wages payable
30,600 Income taxes payable
40,150 Long-term note payable, secured by mortgage on plant assets
3,050 Common stock
153,300 Retained earnings
$ 251, 300 Total liabilities and equity
$ 18,500
4,400
3,000
63,400
81,000
81,000
$ 251, 300
Total assets
CABOT CORPORATION
Income Statement
For Current Year Ended December 31
$ 454,600
297,150
157,450
99,100
4,300
54,050
21,774
Sales
Cost of goods sold
Gross profit
Operating expenses
Interest expense
Income before taxes
Income tax…
Selected current year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts
at December 31 of the prior year were inventory. $49,900: total assets. $209,400; common stock, $87,000; and retained earnings,
$41,829.)
CABOT CORPORATION
Balance Sheet
December 31
Assets
Liabilities and Equity
Cash
Short-term investments
Accounts receivable, net
Merchandise inventory
18, 000 Accounts payable
9, 200
30, 800 Income taxes payable
40,150 Long-term note payable, secured by
18,500
3, 800
4,400
65,400
Accrued wages payable
mortgage on plant assets
Prepaid expenses
Plant assets, net
2,800 Common stock
151, 300 Retained earnings
$ 252, 250 Total liabilities and equity
87, e00
73,150
$ 252, 250
Total assets
CABOT CORPORATION
Income Statement
For Current Year Ended December 31
$ 453, 600
297,850
155,750
98, 500
4,800
52,450
21,129
Sales
Cost of goods sold
Gross profit
Operating expenses
Interest expense
Income before taxes
Income tax expense
Net…
Chapter 5 Solutions
Intermediate Accounting (2nd Edition)
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Ch. 5 - What are the six key items to be reported on the...Ch. 5 - Explain why operating income is an important...Ch. 5 - Prob. 5.13QCh. 5 - Prob. 5.14QCh. 5 - What items are included in net income?Ch. 5 - Are items of other comprehensive income included...Ch. 5 - What two choices must companies make when...Ch. 5 - Prob. 5.18QCh. 5 - Prob. 5.19QCh. 5 - Are companies reporting under U.S. GAAP required...Ch. 5 - What accounts are summarized on the statement of...Ch. 5 - What is financial statement analysis?Ch. 5 - Prob. 5.23QCh. 5 - What are comparative financial statements and why...Ch. 5 - What is the difference between vertical and...Ch. 5 - Prob. 5.26QCh. 5 - Explain the difference between return on equity...Ch. 5 - How is a companys profit margin calculated?Ch. 5 - Prob. 5.1MCCh. 5 - Moore Furniture Inc., a public company, has...Ch. 5 - Beach and Poole, CPA is reviewing income statement...Ch. 5 - Prob. 5.4MCCh. 5 - Allison Corporations current year income from...Ch. 5 - Prob. 5.6MCCh. 5 - Chili Co. had the following balances at December...Ch. 5 - Szuba Corporation reported the following...Ch. 5 - Prob. 5.9MCCh. 5 - Prob. 5.1BECh. 5 - Prob. 5.2BECh. 5 - Advantages and Disadvantages of the Income...Ch. 5 - Identify each of the earnings items as primarily...Ch. 5 - Income Statement Presentation. Place the...Ch. 5 - Statement of Net Income Presentation, IFRS. Which...Ch. 5 - Single-Step Statement of Net Income. Carr...Ch. 5 - Statement of Net Income, IFRS. Using the...Ch. 5 - Multiple-Step Statement of Net Income. Using the...Ch. 5 - Condensed Statement of Net Income. Using the...Ch. 5 - Prob. 5.11BECh. 5 - Prob. 5.12BECh. 5 - Discontinued Operations. Jojo, Inc. held a...Ch. 5 - Prob. 5.14BECh. 5 - Prob. 5.15BECh. 5 - Prob. 5.16BECh. 5 - Computation of Retained Earnings. Taxi Cabs, Inc...Ch. 5 - Computation of Contributed Capital. Using the...Ch. 5 - Prob. 5.19BECh. 5 - Prob. 5.20BECh. 5 - Prob. 5.21BECh. 5 - Ratio Analyses. Green Grasshopper Incorporated is...Ch. 5 - Multiple-Step and Single-Step Statements of Net...Ch. 5 - Condensed Statement of Net Income. Using the trial...Ch. 5 - Prob. 5.3ECh. 5 - Prob. 5.4ECh. 5 - Multiple-step Statement of Net Income. The current...Ch. 5 - Condensed Statement of Net Income. Using the...Ch. 5 - Multiple-step income Statement. Ciara s Cookie...Ch. 5 - Prob. 5.8ECh. 5 - Prepare Statement of Stockholders' Equity. Dane...Ch. 5 - Prepare Statement of Stockholders Equity. Ciaras...Ch. 5 - Prepare a Statement of Stockholders' Equity....Ch. 5 - Profitability Analyses. Use the following excerpt...Ch. 5 - Multiple-Step and Single-Step income Statement,...Ch. 5 - Condensed Income Statement. Using the information...Ch. 5 - Multiple-step, Single-step, and Condensed...Ch. 5 - Statement of Net Income Presentation. IFRS....Ch. 5 - Income Statement Presentation, Classification, and...Ch. 5 - Prob. 5.6PCh. 5 - Multiple-step, Single-step, and Condensed...Ch. 5 - Statement of Comprehensive Income Single-and...Ch. 5 - Prepare Statement of Stockholders Equity. Use the...Ch. 5 - Prob. 5.10PCh. 5 - Prob. 1JCCh. 5 - Financial Statement Analysis Case 1: Vertical...Ch. 5 - Prob. 2FSCCh. 5 - Prob. 1SSCCh. 5 - Surfing the Standards Case 2: Amounts Paid by...Ch. 5 - Prob. 1BCCCh. 5 - Prob. 2BCC
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