Intermediate Accounting
9th Edition
ISBN: 9781259722660
Author: J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Textbook Question
Chapter 4, Problem 4.8P
Multiple-step statement of income and comprehensive income
• LO4–1, LO4–3, LO4–5, LO4–6
Duke Company’s records show the following account balances at December 31, 2018:
| Sales | $15,000,000 |
| Cost of goods sold | 9,000,000 |
| General and administrative expenses | 1,000,000 |
| Selling expenses | 500,000 |
| Interest expense | 700,000 |
Income tax expense has not yet been determined. The following events also occurred during 2018. All transactions are material in amount.
1. $300,000 in restructuring costs were incurred in connection with plant closings.
2. Inventory costing $400,000 was written off as obsolete. Material losses of this type are considered to be unusual.
3. It was discovered that
4. The company experienced a negative foreign currency translation adjustment of $200,000 and had unrealized gains on investments of $180,000.
Required:
Prepare a single, continuous multiple-step statement of comprehensive income for 2018. The company’s effective tax rate on all items affecting comprehensive income is 40%. Each component of other comprehensive income should be displayed net of tax. Ignore EPS disclosures.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
E4.17 (LO 2, 3, 5) The following information was taken from the records of Roland Carlson Inc. for the year 2020:
Income tax applicable to income from continuing operations $187,000, Income tax applicable to loss on discontinued operations $25,500Gain on sale of equipment $ 95,000 Cash dividends declared $ 150,000Loss on discontinued operations 75,000 Retained earnings January 1, 2020 600,000Administrative expenses 240,000 Cost of goods sold 850,000Rent revenue 40,000 Selling expenses 300,000Loss on write-down of inventory 60,000 Sales revenue 1,900,000
Shares outstanding during 2020 were 100,000.
Prepare a multiple step income statement (including earnings per share) and a statement of…
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…
A2 1g
May I please have the answer in formula form and not in excel. Thx:)
Use the following information for Delta Corporation to answer question 1:
Year
20X1
20X2
Net sales
$1,500,000
$1,656,598
Cost of goods sold
675,000
745,469
Depreciation
270,000
298,188
Interest paid
43,600
44,000
Cash
127,500
140,811
Account’s receivable
450,000
496,980
Inventory
525,000
579,809
Net fixed assets
1,800,000
1,987,918
Accounts payable
375,000
414,150
Notes payable
45,000
50,000
Long-term debt
500,000
500,000
Common stock
1,000,000
1,000,000
Retained earnings
982,500
1,241,368
Tax rate
35%
35%
Dividend payout
30%
30%
Delta has 600,000 common shares outstanding. The firm is projecting a 20% increase in net sales for the coming year (20X3). Delta uses the percentage of sales approach to plan for its financing needs. In using this approach, the firm assumes that cost of…
Chapter 4 Solutions
Intermediate Accounting
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,...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- 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.)arrow_forwardEA5. LO 12.3During the current year, Sokowski Manufacturing earned income of $350,000 from total sales of $5,500,000 and average capital assets of $12,000,000. What is the sales margin?arrow_forwardPA3. LO 7.4The following transactions occurred for Donaldson Inc. during the month of July. Jul. 1 Sold 50 items to Palm Springs Inc. and offered terms of 2/10, n/30, $4,000 on July 1, and issued invoice #12 on account number #312 Jul. 5 Sold 20 thing-a-jigs to Miami Inc. for $2,150 cash on July 5, and issued invoice #13 Jul. 8 Sold 30 what-is to Smith Mfg. for $5,000 and offered terms of 2/10, n/30; issued invoice #14 on account number #178 Jul. 9 Received payment from Palm Springs Inc. Jul. 22 Received payment from Smith Mfg. after expiration of the discount period Record the transactions for Donaldson Inc. in the proper special journal and subsidiary ledger. Record the same transactions using QuickBooks, and print the journals and subsidiary ledger. They should match.arrow_forward
- A2 1 f Use the following information for Delta Corporation to answer question 1: Year 20X1 20X2 Net sales $1,500,000 $1,656,598 Cost of goods sold 675,000 745,469 Depreciation 270,000 298,188 Interest paid 43,600 44,000 Cash 127,500 140,811 Accounts receivable 450,000 496,980 Inventory 525,000 579,809 Net fixed assets 1,800,000 1,987,918 Accounts payable 375,000 414,150 Notes payable 45,000 50,000 Long-term debt 500,000 500,000 Common stock 1,000,000 1,000,000 Retained earnings 982,500 1,241,368 Tax rate 35% 35% Dividend payout 30% 30% Delta has 600,000 common shares outstanding. The firm is projecting a 20% increase in net sales for the coming year (20X3). Delta uses the percentage of sales approach to plan for its financing needs. In using this approach, the firm assumes that cost of goods sold, all assets (current and fixed), and accounts payable will…arrow_forwardA2 1 g Use the following information for Delta Corporation to answer question 1: Year 20X1 20X2 Net sales $1,500,000 $1,656,598 Cost of goods sold 675,000 745,469 Depreciation 270,000 298,188 Interest paid 43,600 44,000 Cash 127,500 140,811 Accounts receivable 450,000 496,980 Inventory 525,000 579,809 Net fixed assets 1,800,000 1,987,918 Accounts payable 375,000 414,150 Notes payable 45,000 50,000 Long-term debt 500,000 500,000 Common stock 1,000,000 1,000,000 Retained earnings 982,500 1,241,368 Tax rate 35% 35% Dividend payout 30% 30% Delta has 600,000 common shares outstanding. The firm is projecting a 20% increase in net sales for the coming year (20X3). Delta uses the percentage of sales approach to plan for its financing needs. In using this approach, the firm assumes that cost of goods sold, all assets (current and fixed), and accounts payable will…arrow_forwardNineteen measures of solvency and profitability The comparative financial statements of Stargel Inc. are as follows. The market price of Stargel Inc. common stock was 119.70 on December 31, 2016. Stargel Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 2016 and 2015 2016 2015 Retained earnings, January 1................ 5,375,000 4,545,000 Add net income for year......................... 900,000 925,000 Total..................................... 6,275,000 5,470,000 Deduct dividends: On preferred stock............................................. 45,000 45,000 On common stock.............................................. 50,000 50,000 Total........................................................ 95,0000 95,000 Retained earnings, December 3................................... 6,180,000 5,375,000 Stargel Inc. Comparative Income Statement For the Year Ended December 31, 2016 and 2015 2016 2015 Sales..................... 10,000,000 9,400,000 Cost of goods sold......... 5,350,000 4,950,000 Gross profit............... 4,650,000 4,450,000 Selling expenses.......... 2,000,000 1,080,000 Administrative expenses... 1,500.000 1,410,000 Total operating expenses 3,500,000 3,290,000 Income from operations ... 1,150,000 1,160,000 Other income............. 150,000 140,000 1,300,000 1,300,000 Other expense (interest). 170,000 150,000 Income before income tax 1,130,000 1,150,000 Income tax expense....... 230,000 225,000 Net income............... 900,000 925,000 Stargel Inc. Comparative Income Statement For the Year Ended December 31, 2016 and 2015 Dec.31, 2016 Dec. 31, 2015 Assets Current Assets: Cash.................................... 500,000 400,000 Marketable securities.................... 1,010,000 1,000,000 Accounts receivable (net)................. 740,000 510,000 Inventories.............................. 1,190000 950,000 Prepaid expenses........................ 250,000 229,000 Total current assets..................... 3,690,000 3,089,000 Long-term investments.................... 2,350,000 2,300,000 Property, plant and equipment (net)....... 3,740,000 3,366,000 Total assets............................... 9,780,000 8,755,000 Liabilities Current liabilities.......................... 900,000 880,000 Long-term liabilities: Mortgage note payable, 8.8%, due 2021... 200,000 0 Bonds payable, 9%, due 2017............. 1,500,000 1,500,000 Total long term liabilities............... 1,700,000 1,500,000 Total liabilities............................ 2,600,000 2,380,000 Stockholders' equity Preferred stock 0.90, 10 par.. 500,000 500,000 Common stock. 5 par..................... 500,000 500,000 Retained earnings......................... 6,180,000 5,375,000 Total stockholders' equity............... 7,180,000 6,375,000 Total liabilities and stockholders' equity..... 9,780,000 8,755,000 Instructions Determine the following measures for 2016, rounding to one decimal place, except per share amounts, which should be rounded to the nearest penny: 1. Working capital 2. Current ratio 3. Quick ratio 4. Accounts receivable turnover 5. Number of days salts in receivables 6. Inventory turnover 7. Number of days sales in inventory 8. Ratio of fixed assets to long-term liabilities 9. Ratio of liabilities to .stockholders' equity 10. Number of times interest charges are earned 11. Number of times preferred dividends are earned 12. Ratio of sales to assets 13. Rate earned on total assets 14. Rate earned on stockholders' equity 15. Rate earned on common stockholders' equity 16. Earnings per share on common stock 17. Price-earnings ratio 18. Dividends per share of common stock 19. Dividend yieldarrow_forward
- Nineteen measures of solvency and profitability The comparative financial statements of Bettancort Inc. are as follows. The market price of Bettancort Inc. common stock was 71.25 on December 31, 2016. Bettancort Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 2016 and 2015 2016 2015 Retained earnings. January 1......................................... 2,655,000 2,400,000 Add net income for year............................................. 300,000 280,000 Total............................................................... 2,955,000 2,680,000 Deduct dividends: On preferred stock................................................ 15,000 15,000 On common stock................................................. 10,000 10,000 Total........................................................... 25,000 25,000 Retained earnings. December 31..................................... 2,930,000 2,655,000 Bettancort Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 2016 and 2015 2016 2015 Sales...................... 1,200,000 1,000,000 Cost of goods sold............ 500,000 475,000 Gross profit............... 700,000 525,000 Selling expenses.......... 240,000 200,000 Administrative expenses...... 180,000 150,000 Total operating expenses.. 420,000 350,000 Income from operations.. 280,000 175,000 Other income............. 166,000 225,000 446,000 400,000 Other expense (Interest)... 66,000 60,000 Income before income tax 380,000 340,000 Income tax expense....... 80,000 60,000 Net income............... 300,000 280,000 Bettancort Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 2016 and 2015 Dec.31, 2016 Dec. 31, 2015 Assets Current Assets: Cash.................................... 450,000 400,000 Marketable securities.................... 300,000 260,000 Accounts receivable (net)................. 130,000 110,000 Inventories.............................. 67,000 58,000 Prepaid expenses........................ 153,000 139,000 Total current assets..................... 1,100,000 967,000 Long-term investments.................... 2,350,000 2,200,000 Property, plant and equipment (net)....... 1,320,000 1,118,000 Total assets............................... 4,770,000 4,355,000 Liabilities Current liabilities.......................... 440,000 400,000 Long-term liabilities: Mortgage note payable, 8.8%, due 2021... 100,000 0 Bonds payable, 9%, due 2017............. 1,000,000 1,000,000 Total long term liabilities............... 1,100,000 1,000,000 Total liabilities............................ 1,540,000 1,400,000 Stockholders' equity Preferred stock 0.90, 10 par.. 200,000 200,000 Common stock. 5 par..................... 100,000 100,000 Retained earnings......................... 2,930,000 2,665,000 Total stockholders equity............... 3,230,000 2,955,000 Total liabilities and stockholders' equity..... 4,770,000 4,355,000 Instructions Determine the following measures for 2016, rounding to one decimal place: 1. Working capital 2. Current ratio 3. Quick ratio 4. Accounts receivable turnover 5. Number of days' sales in receivables 6. Inventory turnover 7. Number of days' sales in inventory 8. Ratio of fixed assets to long-term liabilities 9. Ratio of liabilities to stockholders equity 10. Number of times interest charges are earned 11. Number of times preferred dividends are earned 12. Ratio of sales to assets 13. Rate earned on total assets 14. Rate earned on stockholders' equity 15. Rate earned on common stockholders' equity 16. Earnings per share on common stock 17. Price-earnings ratio 18. Dividends per share of common stock 19. Dividend yieldarrow_forwardGross profit During the current year, merchandise is sold for 18,300 cash and 295,700 on account. The cost of the goods sold is 188,000. What is the amount of the gross profit?arrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
Financial & Managerial AccountingAccountingISBN:9781285866307Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage Learning
Corporate Financial AccountingAccountingISBN:9781305653535Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage Learning
Financial & Managerial Accounting
Accounting
ISBN:9781285866307
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
Corporate Financial Accounting
Accounting
ISBN:9781305653535
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
The KEY to Understanding Financial Statements; Author: Accounting Stuff;https://www.youtube.com/watch?v=_F6a0ddbjtI;License: Standard Youtube License