Flamengo Co is a sporting goods manufacturing. Last year, report the following Income Statement: Sales $620,000 Cost of goods sold 316,000 Gross margin $304,000 Selling and administrative expense 246,000 Operating income $ 58,000 Less: Income taxes (at 40%) 34,000 Net income S 24,000 At the beginning of the year, the value of operating assets was $263,000. At the end of the year, the value of operating assets was $363,000. Flamengo Co. requires a minimum rate of return of 15%. Total capital employed equals $350,000 and the actual cost of capital is 6%. Calculate the Residual Income. (Carry computations out to two decimal places.)

Flamengo Co is a sporting goods manufacturing. Last year, report the following Income Statement: Sales $620,000 Cost of goods sold 316,000 Gross margin $304,000 Selling and administrative expense 246,000 Operating income $ 58,000 Less: Income taxes (at 40%) 34,000 Net income S 24,000 At the beginning of the year, the value of operating assets was $263,000. At the end of the year, the value of operating assets was $363,000. Flamengo Co. requires a minimum rate of return of 15%. Total capital employed equals $350,000 and the actual cost of capital is 6%. Calculate the Residual Income. (Carry computations out to two decimal places.)

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter5: The Income Statement And The Statement Of Cash Flows

Section: Chapter Questions

Problem 1RE: Brandt Corporation had sales revenue of 500,000 for the current year. For the year, its cost of...

See similar textbooks

Similar questions

During the current year. Plainfield Manufacturing earned income of $845,000 from total sales of $9,350,000 and average capital assets of $13,500,000. What is the sales margin?
During the current year, Plainfield Manufacturing earned income of $845,000 from total sales of $9,350,000 and average capital assets of $13,500,000. Using the sales margin from the previous exercise, what is the total ROI for the company during the current year?
Brandt Corporation had sales revenue of 500,000 for the current year. For the year, its cost of goods sold was 240,000, its operating expenses were 50,000, its interest revenue was 2,000, and its interest expense was 12,000. Brandts income tax rate is 30%. Prepare Brandts multiple-step income statement for the current year.
Ellerson Company provided the following information for the last calendar year: During the year, direct materials purchases amounted to 278,000, direct labor cost was 189,000, and overhead cost was 523,000. During the year, 100,000 units were completed. Refer to Exercise 2.21. Last calendar year, Ellerson recognized revenue of 1,312,000 and had selling and administrative expenses of 204,600. Required: 1. What is the cost of goods sold for last year? 2. Prepare an income statement for Ellerson for last year.
Xenold, Inc., manufactures and sells cooktops and ovens through three divisions: Home, Restaurant, and Specialty. Each division is evaluated as a profit center. Data for each division for last year are as follows (numbers in thousands): The income tax rate for Xenold, Inc., is 40 percent. Xenold, Inc., has two sources of financing: bonds paying 5 percent interest, which account for 25 percent of total investment, and equity accounting for the remaining 75 percent of total investment. Xenold, Inc., has been in business for over 15 years and is considered a relatively stable stock, despite its link to the cyclical construction industry. As a result, Xenold stock has an opportunity cost of 5 percent over the 4 percent long-term government bond rate. Xenolds total capital employed is 5.04 million (2,600,000 for the Home Division, 1,700,000 for the Restaurant Division, and the remainder for the Specialty Division). Required: 1. Prepare a segmented income statement for Xenold, Inc., for last year. 2. Calculate Xenolds weighted average cost of capital. (Round to four significant digits.) 3. Calculate EVA for each division and for Xenold, Inc. 4. Comment on the performance of each of the divisions.
Johnson Corporation had beginning inventory of 20,000 at cost and 35,000 at retail. During the year, it made net purchases of 180,000 at cost and 322,000 at retail. Johnson nude sales of 300,000. Assuming a price index of 100 at the beginning of the year and 110 at the end of the year, compute Johnsons ending inventory at cost using the dollar-value LIFO retail method.
Park and West, LLC, provides consulting services to retail merchandisers in the Midwest. In 2019, they generated $720,000 in service revenue. Their total cost (fixed and variable) per client was $2,500 and they served 115 clients during the year. If operating expenses for the year were $302,000 what was their net income?
XYZ Company has the following information for the year: Sales revenue: $500,000 Cost of goods sold: $200,000 Operating expenses: $100,000 Other income: $10,000 Tax rate: 25% Calculate the company's operating income and net income for the year.
Below is the Income Statement of Babana Inc. for the current year: Sales 18,000,000 Less: Cost of goods sold 8,400,000 Gross income 9,600,000 Gain on sale of equipment 300,000 Total income 9,900,000 Less: Operating expenses 1,500,000 Casualty loss 900,000 Income before tax 7,500,000 Less: Income tax 30% 2,250,000 Net income 5,250,000 Additional information: Third quarter sales were 30% of total sales. For interim reporting purposes, a gross profit of 40% can justified. Variable operating expenses are allocated in the same proportion as sales. Fixed operating expenses are allocated based on the expiration of time. Of the total operating expenses, P1,200,000 relate to variable expenses and P300,000 relate to fixed expenses. The equipment was sold on June 1. The casualty loss occurred on September 1. What amount should be reported as net income for the third quarter ended September 30? A. 1,560,000B. 825,000C. 577,500D. 925,000
Revenue and expense data for the current calendar year for Tannenhill Company and for the electronics industry are as follows. Tannenhill’s data are expressed in dollars. The electronics industry averages are expressed in percentages. TannenhillCompany ElectronicsIndustryAverage Sales $800,000 100 % Cost of goods sold 512,000 70 Gross profit $288,000 30 % Selling expenses $176,000 17 % Administrative expenses 64,000 7 Total operating expenses $240,000 24 % Operating income $48,000 6 % Other revenue 16,000 2 $64,000 8 % Other expense 8,000 1 Income before income tax $56,000 7 % Income tax expense 24,000 5 Net income $32,000 2 % a. Prepare a common-sized income statement comparing the results of operations for Tannenhill Company with the industry average. If required, round percentages to one decimal place. Enter all amounts as positive numbers.
.The following information has been provided by the Rose Toiletries. Co Ltd. for the Second quarter of the year: Cost of goods sold $ 80,000 Fixed administrative expenses 19,000 Fixed selling expenses 10,000 Sales 200,000 Variable administrative expenses 5,000 Variable selling expense 12,000 1. What was the company’s Net operating Income for the first quarter?
Prairie Corporation has sales of $7,000,000 in its first year of operation. During this first year of operations its variable costs of goods sold were $2,500,000 of sales. Fixed cost of goods sold were $400,000. Selling and administrative cost were $1,400,000 and taxes were $700,000. Please calculate Prairie Corporation's after-tax income.