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Intermediate Accounting: Reporting...
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Intermediate Accounting: Reporting...
Comprehensive: Income Statement and Supporting Schedules The following s a partial list of the account balances, after adjustments, of Silvoso Company on December 31, 2019:
The following information is also available:
- 1. The company declared and paid a $0.60 per share cash dividend on its common stock. The stock was outstanding the entire year.
- 2. A physical count determined that the December 31, 2019, ending inventory is $34,100.
- 3. A tornado destroyed a warehouse, resulting in a pretax loss of $12,000. The last tornado in this area had occurred 10 years earlier.
- 4. On May 1, 2019, the company sold an unprofitable division (R). From January through April, Division R (a major component of the company) had incurred a pretax operating loss of $8,700. Division R was sold at a pretax gain of $10,000.
- 5. The company is subject to a 30% income tax rate. Its income tax expense for 2019 totals $4,230. The breakdown is as follows:
- 6. The company had average shareholders’ equity of $150,000 during 2019.
Required:
- 1. As supporting documents for Requirement 2, prepare separate supporting schedules for cost of goods sold, selling expenses, general and administrative expenses, and depreciation expense.
- 2. Prepare a 2019 multiple-step income statement for Silvoso. Include any related note to the financial statements.
- 3. Prepare a 2019 retained earnings statement.
- 4. Next Level What was Silvoso’s return on common equity for 2019? What is your evaluation of Silvoso’s return on common equity if last year it was 10%?
1.
Provide supporting schedules for cost of goods sold, selling expenses, general and administrative expenses, and depreciation expense.
Cost of goods sold: Cost of goods sold is the total of all the expenses incurred by a company to sell the goods during the given period.
Schedule of cost of goods sold is a report which reports cost of goods sold in a detailed manner.
Provide the schedule of cost of goods sold:
| Company S | ||
| For the Year Ended December 31, 2019 | ||
| Schedule 1: Cost of goods sold | ||
| Particulars | Amount | Amount |
| ($) | ($) | |
| Beginning inventory | Â | $37,800 |
| Add: Purchases | $173,000 | Â |
| Â Â Â Â Â Â Â Â Transportation in | $13,500 | Â |
| Cost of purchases | $186,500 | Â |
| Less: Purchase discount taken | ($4,100) | Â |
| Â Â Â Â Â Â Â Â Â Purchases returns and allowances | ($6,200) | Â |
| Net purchases | Â | $176,200 |
| Cost of goods available for sale | Â | $214,000 |
| Less: Ending inventory | Â | ($34,100) |
| Cost of goods sold | Â | $179,900 |
Table (1)
Provide the schedule of selling expenses:
| Company S | ||
| For the Year Ended December 31, 2019 | ||
| Schedule 2: Selling Expenses | ||
| Particulars | Amount ($) | Amount ($) |
| Selling expenses: | Â | Â |
| Â Â Â Â Â Sales commission salaries | $18,200 | Â |
| Â Â Â Â Â Sales supplies used | $5,600 | Â |
| Â Â Â &... | ||
2.
Provide a multi-step income statement for the year 2019.
3.
Provide a retained earnings statement for the year 2019.
4.
Evaluate the return on common equity if it was 10% last year for Company S.
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