The following are extracts from the Music Group's financial statements: Income statement Sales Cost of goods sold (excl. Depreciation) Depreciation Gross profit SG&A Operating profit Interest expense Earnings before tax Tax Net income Balance sheet Cash Accounts receivable Inventory Total current assets Property, plant & equipment Total assets Accounts payable Taxes payable Total current liabilities Long term debt Total liabilities Share capital and premium Retained earnings Prior year 1,430 7,540 3,120 12,090 41,600 53,690 3,900 3,615 7,515 19,500 27,015 10,400 16,275 26,675 53,690 Current year 81,120 34,710 5,460 40,950 25,454 15,496 1,365 14,131 4,211 9,920 Current year 2,770 9,360 3,770 15,900 44,200 60,100 4,550 5,980 10,530 21,450 31,980 11,050 17,070 28,120 60,100 Total equity Total liabilities and equity Reconcile the retained earnings of Music Group in order to calculate its dividends declared in the current year.

The following are extracts from the Music Group's financial statements: Income statement Sales Cost of goods sold (excl. Depreciation) Depreciation Gross profit SG&A Operating profit Interest expense Earnings before tax Tax Net income Balance sheet Cash Accounts receivable Inventory Total current assets Property, plant & equipment Total assets Accounts payable Taxes payable Total current liabilities Long term debt Total liabilities Share capital and premium Retained earnings Prior year 1,430 7,540 3,120 12,090 41,600 53,690 3,900 3,615 7,515 19,500 27,015 10,400 16,275 26,675 53,690 Current year 81,120 34,710 5,460 40,950 25,454 15,496 1,365 14,131 4,211 9,920 Current year 2,770 9,360 3,770 15,900 44,200 60,100 4,550 5,980 10,530 21,450 31,980 11,050 17,070 28,120 60,100 Total equity Total liabilities and equity Reconcile the retained earnings of Music Group in order to calculate its dividends declared in the current year.

College Accounting (Book Only): A Career Approach

12th Edition

ISBN:9781305084087

Author:Cathy J. Scott

Publisher:Cathy J. Scott

Chapter12: Financial Statements, Closing Entries, And Reversing Entries

Section: Chapter Questions

Problem 3E

See similar textbooks

Similar questions

Which of the following is a measurement of earnings that represents the profit before interest, taxes, depreciation and amortization are subtracted? A. net income B. retained earnings C. EBITDA D. EPS
The income statement, statement of retained earnings, and balance sheet for Santiago Systems are as follows: Includes both state and federal taxes. Refer to the information for Santiago Systems above. Required: Compute the price-earnings ratio. (Note: Round the answer to two decimal places.)
If a company capitalizes costs that should be expensed, how is its income statement for the current period impacted? A. Assets understated B. Net Income understated C. Expenses understated D. Revenues understated
Identify each of the following items relating to sections of an income statement as Revenue from Sales (S), Cost of Goods Sold (CGS), Selling Expenses (SE), General Expenses (GE), Other Income (OI), or Other Expenses (OE). a. Utilities Expense b. Advertising Expense c. Purchases Discounts d. Sales Returns and Allowances e. Interest Income f. Freight In g. Depreciation Expense, Equipment h. Interest Expense i. Rent Expense j. Sales
If a company reports a gain/(loss) from the sale of assets, as part of the net income on the income statement, and the net book value of those assets on the date of the sale is known, can the amount of the cash proceeds from the sale be determined? If so, how?
Define each of the following terms: Annual report; balance sheet; income statement Common stockholders’ equity, or net worth; retained earnings Statement of stockholders’ equity; statement of cash flows Depreciation; amortization; EBITDA Operating current assets; operating current liabilities; net operating working capital; total net operating capital Accounting profit; net cash flow; NOPAT; free cash flow; return on invested capital Market Value Added; Economic Value Added Progressive tax; taxable income; marginal and average tax rates Capital gain or loss; tax loss carryforward Improper accumulation; S corporation
What to put in the income statement based on this list? InventoryBuildings & ImprovementsAccumulated Depreciation - Buildings & ImprovementsFurniture & FixturesAccumulated Depreciation - Furniture & FixturesOffice EquipmentAccumulated Depreciation - Office EquipmentAccounts PayableLoans PayableAccrued LiabilitiesSalaries PayableEmployee Benefits PayablePaid-Up Share Capital - CommonAdditional Paid in CapitalRetained EarningsSalesFees and Surcharges & FinesOther Income & GainsMiscellaneous IncomeCost of SalesInterest ExpenseOffice Supplies ExpenseTravel and TransportationTaxes and LicensesProfessional FeesRent ExpenseMeeting and ConferencesBad Debts ExpenseDepreciation Expense - B&IDepreciation Expense - FFDepreciation Expense - OEEmployees Benefit ExpenseSalaries & WagesCommunicationMiscellaneous ExpensesIncome Summary
Listed below are several terms and phrases associated with income statement presentation and the statement ofcash flows. Pair each item from List A (by letter) with the item from List B that is most appropriately associatedwith it.List A List B_____ 1. Intraperiod tax allocation_____ 2. Comprehensive income_____ 3. Unrealized holding gain oninvestments_____ 4. Operating income_____ 5. A discontinued operation_____ 6. Earnings per share_____ 7. Prior period adjustment_____ 8. Financing activities_____ 9. Operating activities (SCF)_____ 10. Investing activities_____ 11. Direct method_____ 12. Indirect methoda. An other comprehensive income itemb. Starts with net income and works backwards to convert tocashc. Reports the cash effects of each operating activity directly onthe statementd. Correction of a material error of a prior periode. Related to the external financing of the companyf. Associates tax with income statement itemg. Total nonowner change in equityh. Related to the…
Assume an income statement with the following classifications: RevenuesCost of goods soldDistribution expensesGeneral & administrative expensesOther revenues and expensesIncome tax on income from continuing operationsGain from disposal of discontinued operationsIncome tax on gain from discontinued operationsNone of the above Indicate by letter how each of the following should be classified: Advertising expense Amortization of a patent held as an investment Cash dividend received on short-term investment Depreciation on plant that manufactures good for sale (prior to sale of the goods) Freight on sales Income tax effect of loss on sale of plant Income tax on gain on sale of short-term investment in securities Interest expense Interest revenue Loss on sale of patent Dividend revenue from investment Salary of company president Sales Sales returns Services sold
Which is the CORRECT order for items to appear on the income statement? Group of answer choices sales revenue, gross profit, net income, operating expenses cash, accounts receivable, inventory, property/plant/equipment, intangible assets sales revenue, operating expenses, gross profit, net income sales revenue, cost of goods sold, gross profit, operating expenses sales revenue, gross profit, cost of goods sold, operating expenses
If a company capitalizes costs that should be expensed, how is its income statement for the currentperiod impacted?A. Assets understatedB. Net Income understatedC. Expenses understatedD. Revenues understated
Based on the income statement given calculate and explain the :profitability ratioa. Gross profit ratio = gross profit/net salesb. Operating margin ratio =operating income/net salesc. Asset Turnover ratio = net sales / total assetsd. Return on equity ratio = net sales/ shareholders equity Leverage ratioa. interest coverage ratio =operating income / interest expensesb. Debt service ratio=operating income/debt service