INTERMEDIATE ACCT VOL.2>CUSTOM<
9th Edition
ISBN: 9781307165067
Author: SPICELAND
Publisher: MCG/CREATE
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Chapter 4, Problem 4.5E
Income statement presentation
• LO4–1, LO4–5
The following incorrect income statement was prepared by the accountant of the Axel Corporation:
| AXEL CORPORATION Income Statement For the Year Ended December 31, 2018 |
||
| Revenues and gains: | ||
| Sales | $592,000 | |
| Interest and dividends | 32,000 | |
| Gain on sale of investments | 86,000 | |
| Total revenues and gains | 710,000 | |
| Expenses and losses: | ||
| Cost of goods sold | $325,000 | |
| Selling expenses | 67,000 | |
| Administrative expenses | 87,000 | |
| Interest | 26,000 | |
| Restructuring costs | 55,000 | |
| Income taxes | 60,000 | |
| Total expenses and losses | 620,000 | |
| Net Income | $ 90,000 | |
| Earnings per share | $ 0.90 | |
Required:
Prepare a multiple-step income statement for 2018 applying generally accepted accounting principles. The income tax rate is 40%.
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P4.5 (LO 2, 3, 4, 5) (Unusual or Infrequent Items) Presented below is a combined single-step income and retained earnings statement for Nerwin Company for 2020.
(000 omitted)
Net sales revenue
$640,000
Costs and expenses
Cost of goods sold
$500,000
Selling, general, and administrative expenses
66,000
Other, net
17,000
583,000
Income before income tax
57,000
Income tax
19,400
Net income
37,600
Retained earnings at beginning of period, as previously reported
141,000
Adjustment required for correction of error
(7,000)
Retained earnings at beginning of period, as restated
134,000
Dividends on common stock
(12,200)
Retained earnings at end of period
$159,400
Additional facts are as follows.
1. “Selling, general, and administrative expenses” for 2020 included a charge of $8,500,000…
Problem 4-5 EFN [LO2]
The most recent financial statements for Assouad, Inc., are shown here:
Income Statement
Balance Sheet
Sales
$
11,900
Current assets
$
6,000
Current liabilities
$
3,600
Costs
8,500
Fixed assets
10,600
Long-term debt
5,100
Taxable income
$
3,400
Equity
7,900
Taxes (24%)
816
Total
$
16,600
Total
$
16,600
Net income
$
2,584
Assets, costs, and current liabilities are proportional to sales. Long-term debt and equity are not. The company maintains a constant 45 percent dividend payout ratio. As with every other firm in its industry, next year’s sales are projected to increase by exactly 17 percent.
What is the external financing needed? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
P4.4
(LO 2, 3, 4, 5 ) (Multiple- and Single-Step Statements, Retained Earnings Statement) The following account balances were included in the trial balance of Twain Corporation at June 30, 2020.
Sales revenue
$1,578,500
Depreciation expense (office furniture and equipment)
$7,250
Sales discounts
31,150
Cost of goods sold
896,770
Property tax expense
7,320
Salaries and wages expense (sales)
56,260
Bad debt expense (selling)
4,850
Sales commissions
97,600
Maintenance and repairs expense (administration)
9,130
Travel expense (salespersons)
28,930
Delivery expense
21,400
Office expense
6,000
Entertainment expense
14,820
Sales returns and allowances
62,300
Telephone and Internet expense (sales)
9,030
Dividends received
38,000
Depreciation expense (sales equipment)
4,980
Interest expense
18,000
Maintenance and repairs expense (sales)
6,200
Income tax expense
102,000…
Chapter 4 Solutions
INTERMEDIATE ACCT VOL.2>CUSTOM<
Ch. 4 - The income statement is a change statement....Ch. 4 - What transactions are included in income from...Ch. 4 - Prob. 4.3QCh. 4 - Prob. 4.4QCh. 4 - Prob. 4.5QCh. 4 - What are restructuring costs and where are they...Ch. 4 - Define intraperiod tax allocation. Why is the...Ch. 4 - How are discontinued operations reported in the...Ch. 4 - What is meant by a change in accounting principle?...Ch. 4 - Prob. 4.10Q
Ch. 4 - The correction of a material error discovered in a...Ch. 4 - Define earnings per share (EPS). For which income...Ch. 4 - Prob. 4.13QCh. 4 - Describe the purpose of the statement of cash...Ch. 4 - Prob. 4.15QCh. 4 - Explain what is meant by noncash investing and...Ch. 4 - Distinguish between the direct method and the...Ch. 4 - Prob. 4.18QCh. 4 - Prob. 4.19QCh. 4 - Show the calculation of the following...Ch. 4 - Show the DuPont frameworks calculation of the...Ch. 4 - Prob. 4.22QCh. 4 - Prob. 4.23QCh. 4 - Prob. 4.1BECh. 4 - Multiple -step income statement LO41, LO43 Refer...Ch. 4 - Prob. 4.3BECh. 4 - Multiple -step income statement LO41, LO43 The...Ch. 4 - Prob. 4.5BECh. 4 - Prob. 4.6BECh. 4 - Prob. 4.7BECh. 4 - Discontinued operations LO44 Refer to the...Ch. 4 - Discontinued operations LO44 Refer to the...Ch. 4 - Prob. 4.10BECh. 4 - Prob. 4.11BECh. 4 - Prob. 4.12BECh. 4 - Statement of cash flows; indirect method LO48 Net...Ch. 4 - Prob. 4.14BECh. 4 - Prob. 4.15BECh. 4 - Profitability ratios LO410 The 2018 income...Ch. 4 - Prob. 4.17BECh. 4 - Inventory turnover ratio LO410 During 2018, Rogue...Ch. 4 - Operating versus Nonoperating Income LO41 Pandora...Ch. 4 - Income statement format; single step and multiple...Ch. 4 - Income statement format; single step and multiple...Ch. 4 - Multiple-step continuous statement of...Ch. 4 - Income statement presentation LO41, LO45 The...Ch. 4 - Prob. 4.6ECh. 4 - Income statement presentation; discontinued...Ch. 4 - Discontinued operations; disposal in subsequent...Ch. 4 - Discontinued operations; disposal in subsequent...Ch. 4 - Earnings per share LO45 The Esposito Import...Ch. 4 - Comprehensive income LO46 The Massoud Consulting...Ch. 4 - Prob. 4.12ECh. 4 - Prob. 4.13ECh. 4 - IFRS; statement of cash flows LO48, LO49 Refer to...Ch. 4 - Prob. 4.15ECh. 4 - Prob. 4.16ECh. 4 - Statement of cash flows; indirect method LO48...Ch. 4 - Prob. 4.18ECh. 4 - Prob. 4.19ECh. 4 - Statement of cash flows; indirect method LO48...Ch. 4 - Statement of cash flows; direct method LO48 Refer...Ch. 4 - Prob. 4.22ECh. 4 - Prob. 4.23ECh. 4 - Concepts; terminology LO41, LO42, LO43, LO44,...Ch. 4 - Inventory turnover; calculation and evaluation ...Ch. 4 - Evaluating efficiency of asset management LO410...Ch. 4 - Profitability ratios LO410 The following...Ch. 4 - Prob. 4.28ECh. 4 - Prob. 4.29ECh. 4 - Prob. 4.30ECh. 4 - Prob. 4.31ECh. 4 - Prob. 4.32ECh. 4 - Comparative income statements; multiple-step...Ch. 4 - Discontinued operations LO44 The following...Ch. 4 - Income statement presentation; Discontinued...Ch. 4 - Restructuring costs; Discontinued operations;...Ch. 4 - Income statement presentation; Restructuring...Ch. 4 - Income statement presentation; Discontinued...Ch. 4 - Income statement presentation; statement of...Ch. 4 - Multiple-step statement of income and...Ch. 4 - Statement of cash flows LO48 The Diversified...Ch. 4 - Integration of financial statements; Chapters 3...Ch. 4 - Statement of cash flows; indirect method LO48...Ch. 4 - Calculating activity and profitability ratios ...Ch. 4 - Use of ratios to compare two companies in the same...Ch. 4 - Creating a balance sheet from ratios; Chapters 3...Ch. 4 - Prob. 4.15PCh. 4 - Interim financial reporting Appendix 4 Branson...Ch. 4 - Prob. 4.1BYPCh. 4 - Judgment Case 42 Restructuring costs LO43 The...Ch. 4 - Prob. 4.3BYPCh. 4 - Prob. 4.4BYPCh. 4 - Prob. 4.5BYPCh. 4 - Prob. 4.6BYPCh. 4 - Prob. 4.7BYPCh. 4 - IFRS Case 48 Statement of cash flows;...Ch. 4 - Judgment Case 49 Income statement presentation;...Ch. 4 - Prob. 4.10BYPCh. 4 - Integrating Case 412 Balance sheet and income...Ch. 4 - Prob. 4.13BYPCh. 4 - Prob. 4.17BYPCh. 4 - Prob. 4.18BYPCh. 4 - Continuing Cases Target Case LO43, LO44, LO46,...
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