Intermediate Accounting
3rd Edition
ISBN: 9780136912644
Author: Elizabeth A. Gordon; Jana S. Raedy; Alexander J. Sannella
Publisher: Pearson Education (US)
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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…
Required information
[The following information applies to the questions displayed below.]
Simon Company's year-end balance sheets follow.
At December 31
Assets
Cash
Accounts receivable, net
Merchandise inventory
Prepaid expenses
Plant assets, net
Total assets
Liabilities and Equity
Accounts payable
Long-term notes payable
Common stock, $10 par value
Retained earnings
Total liabilities and equity
Current Year
Interest expense
Income tax expense
Total costs and expenses
Net income
Earnings per share
$ 26,605
89, 200
114,500
8,568
221, 258
$ 460,131
$ 112,281
84,775
162,500
100,575
1 Year Ago
$ 65,696
89,408
162,500
79,061
$ 460, 131 $ 396,665
Current Year
$ 31,099
62,900
85,000
8,163
209,503
$ 396,665
$364,884
185,433
10,169
7,776
The company's income statements for the current year and one year ago follow. Assume that all sales are on credit:
For Year Ended December 31
Sales
Cost of goods sold
Other operating expenses
$ 598,170
2 Years Ago
$ 32,725
50,800
58,000
3,636
192, 139
$…
Chapter 5 Solutions
Intermediate Accounting
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