Chapter 6 Exercise Answers

Wayman Corporation reports the following amounts in its December 31, 2024, income statement. $460,000 Income tax expense Cost of goods sold Advertising expense Sales revenue Interest expense Salaries expense Utilities expense 30,000 50,000 60,000 Required: Prepare a multiple-step income statement. WAYMAN CORPORATION Multiple-Step Income Statement For the Year Ended December 31, 2024 Total operating expenses Operating income $60,000 140,000 40,000

The following are the financial statement JNC Ltd. for the year ended 31 March 2020: JNC Ltd. Income statement For the year ended 31 March 2020   $”M” Revenue 1276.50 Cost of sales (907.00)   369.50 Distribution costs (62.50) Administrative expenses (132.00)   175.00 Interest received   12.50 Interest paid  (37.50)   150.00 Tax (70.00) Profit after tax 80.00 JNC Ltd. Statement of financial position as at 31 March   2020 2019   $”M” $”M” ASSETS:     Non- current assets:     Property, plant and equipment 190 152.5 Intangible assets 125 100 Investments   12.5 Current assets:     Inventories 75 51 Receivables 195 157.5 Short-term investment 25   Cash in hand 1 0.5 Total assets 611 474 Equity and liabilities:     Equity:     Share capital      (10 million ordinary shares of $ 10 per value)  100 75 Share premium  80 75 Revolution reserve 50 45.5 Retained earnings 130 90 Non-current liabilities:     Loan 85 25…

The following are the financial statement Kin Ltd. for the year ended 31 March 2020:   Kin Ltd. Income statement For the year ended 31 March 2020   $”M” Revenue 1276.50 Cost of sales (907.00)   369.50 Distribution costs (62.50) Administrative expenses (132.00)   175.00 Interest received   12.50 Interest paid  (37.50)   150.00 Tax (70.00) Profit after tax 80.00       Kin Ltd. Statement of financial position as at 31 March   2020 2019   $”M” $”M” ASSETS:     Non- current assets:     Property, plant and equipment 190 152.5 Intangible assets 125 100 Investments   12.5 Current assets:     Inventories 75 51 Receivables 195 157.5 Short-term investment 25   Cash in hand 1 0.5 Total assets 611 474 Equity and liabilities:     Equity:     Share capital      (10 million ordinary shares of $ 10 per value)  100 75 Share premium  80 75 Revolution reserve 50 45.5 Retained earnings 130 90 Non-current liabilities:…

Beasley, Inc., reports the following amounts in its December 31, 2021, income statement. Sales revenue Interest expense Salaries expense Utilities expense $320,000 Income tax expense 13,000 32,000 Advertising expense 44,000 $ 32,000 124,000 21,000 Cost of goods sold Prepare a multiple-step income statement. BEASLEY INC., Multiple-Step Income Statement For the year ended December 31, 2021 Total operating expenses Income before income taxes

The following are the financial statement Quick Ltd. for the year ended 31st December 2020:     Quick Ltd. Income statement For year ended 31st December 2020   $”000” Revenue 1276.50 Cost of sales (907.00)   369.50 Distribution costs (62.50) Administrative expenses (132.00)   175.00 Interest received   12.50 Interest paid  (37.50) Profit before tax 150.00 Tax (70.00) Profit after tax 80.00       Quick Ltd. Statement of financial position as at 31 December   2020 2019   $”000” $”000d” ASSETS:     Non- current assets:     Property, plant and equipment 190 152.5 Intangible assets 125 100 Investments   12.5 Current assets:     Inventories 75 51 Receivables 195 157.5 Short-term investment 25   Cash in hand 1 0.5 Total assets 611 474 Equity and liabilities:     Equity:     Share capital   100 75 Share premium  80 75 Revolution reserve 50 45.5 Retained earnings 130 90 Non-current liabilities:     Loan 85 25…

USE THE FOLLOWING INFORMATION FOR THE FOLLOWING REQUIREMENTS. NUMBER FORMAT: 1,000 (NO NEED TO USE PESO SIGN OR LETTER P) EASSY Manufacturing Company presents the following: Statement of Comprehensive Income December 31, 2018 Sales 480,000 Cost of sales 336,000 Gross profit Operating expenses Income before taxes 144,000 57,600 86,400 12,960 Income tax (30%) Net income 73,440 Statement of Financial Position December 31, 2018 Current assets 420,000 Non-current assets 500,000 920,000 Total assets Current liabilities 90,000 Non-current liabilities 250,000 490,000 Ordinary shares Retained earnings Total liabilities and shareholders' equity 90,000 P 920,000 Additional information: 1. Dividends payout is 60%. 2. Only current assets and current liabilities are directly related to sales. 3. The business expects a 30% increase in sales next year. 4. The business is expecting to retain 40% of the earning next year. Expected increase in assets Spontaneous increase in current liabilities.

The following information is available for Tamarisk Corp. for the year ended December 31, 2022. Other revenues and gains   $23,800 Other expenses and losses   4,000 Cost of goods sold   292,000 Sales discounts   4,600 Sales revenue   760,000 Operating expenses   221,000 Sales returns and allowances   10,800 Prepare a multiple-step income statement for Tamarisk Corp. The company has a tax rate of 25%.

Wayman Corporation reports the following amounts in its December 31, 2024, income statement. Sales revenue Interest expense Salaries expense Utilities expense Required: $432,000 26,000 Income tax expense Cost of goods sold 46,000 Advertising expense 56,000 $56,000 136,000 36,000 Prepare a multiple-step income statement. Answer is not complete. WAYMAN CORPORATION Multiple-Step Income Statement For the Year Ended December 31, 2024 Sales revenue $ 432,000 Cost of goods sold (136,000) Gross profit $ 296,000 Interest expense ☑ 26,000 × Salaries expense 46,000 Utilities expense 56,000 Advertising expense Total operating expenses Operating income Income tax expense 36,000 164,000 × 132,000 x 56,000 × Net income $ 76,000

The income statement of Tavis Corporation and selected additional data are presented below: Tavis Corporation Income Statement for the Year Ended December 31, 2020                                                                              Net sales                                                  $220,000 Cost of goods sold                                  __109,000 Gross profit                                                111,000 Selling and general expenses                       _98,000 Income from operations                                13,000 Interest expense                                          __2,500 Income before income tax                             10,500 Income tax expense                                    __3,000 Net income                                                 $ 7,500   Additional data: Total assets                                              $214,000 Common stockholders’ equity                   $116,000 Preferred dividends…

The following are the comparative financial statements for Outland Corporation for 2020 and 2019: OUTLAND CORPORATION Statement of Income For Periods Ending October 31 Sales Revenue Cost of Goods Sold Gross Profit.. 2020 167,500 100,000 67,500 2019 140,000 85,000 55,000 Expenses Depreciation Selling and Administrative Interest Expense. Total Expenses. 15,000 22,500 15,000 15,000 47,500 35,000 Net Income (before taxes). Income Taxes 25,000 10,000 15,000 22,500 7,500 15,000 Net Income OUTLAND CORPORATION Statement of Financial Position As at October 31 2020 2019 Assets Current Assets: 4,000 10,000 35,000 31,000 80,000 Cash. 2,500 7,500 30,000 25,000 65,000 Marketable Securities. Accounts Receivable. Inventory Total Current Assets Investments (at cost).. 30,000 32,500 Property, plant and equipment Property, Plant and Equipment.. Less: Accumulated Depreciation. 200,000 87,500 112,500 2,500 225,000 190,000 80,000 110,000 2,500 210,000 Goodwill Total Assets Liabilities and Shareholders'…

Wayman Corporation reports the following amounts in its December 31, 2021, income statement.Sales revenue        $390,000        Income tax expense   $ 50,000 Interest expense       20,000           Cost of goods sold   130,000 Salaries expense       40,000           Advertising expense   30,000 Utilities expense       50,000Required: Prepare a multiple-step income statement.

The following information is available for Bramble Corporation for the year ended December 31, 2020: cost of goods sold $225,000, sales revenue $477,000, other revenues and gains $51,000, and operating expenses $73,000.Assuming a corporate tax rate of 25%, prepare an income statement for the company.                                                                                  $                                                                $

Hoyt Company provides this information for the month of November, 2022: sales on credit $170,000; cash sales $70,000; sales discounts $2,000; and sales returns and allowances $9,000. Prepare the sales revenues section of the income statement based on this information. V: HOYT COMPANY Income Statement (Partial) $ 4

Wayman Corporation reports the following amounts in its December 31, 2024, income statement. Sales revenue Interest expense Salaries expense Utilities expense Required: $411,000 23,000 43,000 Income tax expense Cost of goods sold Advertising expense 53,000 $53,000 133,000 33,000 Prepare a multiple-step income statement. WAYMAN CORPORATION Multiple-Step Income Statement For the Year Ended December 31, 2024 Total operating expenses Operating income

Operating data for Sheridan Corporation are presented as follows. Net sales Cost of goods sold Selling expenses Administrative expenses Income tax expense Net income Net sales Cost of goods sold Gross profit Selling expenses Administrative expenses Total operating expenses Income before income taxes Income tax expense $ 2027 Prepare a schedule showing a vertical analysis for 2027 and 2026. (Round percentages to 1 decimal place, e.g. 12.1%.) Net income $ $842,800 530,964 126,420 80,066 37,926 67,424 2026 Amount $645,500 413,120 77,460 50,349 25,820 78,751 2027 SHERIDAN CORPORATION Condensed Income Statements For the Years Ended December 31 Percent % % % % % % % % $ % $ Amount 2026 Percent Ih SUPP

15. Selected information about income statement accounts for the Reed Company is presented below (the company's fiscal year ends on December 31):     2021   2020 Sales revenue $ 4,450,000 $ 3,550,000 Cost of goods sold   2,870,000   2,010,000 Administrative expense   810,000   685,000 Selling expense   370,000   312,000 Interest revenue   151,000   141,000 Interest expense   202,000   202,000 Loss on sale of assets of discontinued component   52,000   —    On July 1, 2021, the company adopted a plan to discontinue a division that qualifies as a component of an entity as defined by GAAP. The assets of the component were sold on September 30, 2021, for $52,000 less than their book value. Results of operations for the component (included in the above account balances) were as follows:     1/1/2021–9/30/2021   2020   Sales revenue   $ 410,000       $ 510,000   Cost of goods sold     (295,000 )       (326,000 ) Administrative expense     (51,000 )…

The accounting records of Uniontown Industries, Inc., provided the data below for the year endedDecember 31, 2020:Sales $1,000,000Cost of goods sold 500,000Depreciation expense 15,000Insurance expense 6,000Selling, general and administrative expenses 140,000Interest expense 20,000Income tax expense 125,000Net income 194,000Decrease in inventory 2,000Increase in accounts receivable 1,400Amortization of bond discount 5,000Decrease in prepaid insurance 300Cash dividends paid 20,000Required: In good form, prepare the operating activities section of the statement of cash flows for 2020using the direct method. Show all work for partial credit.

The summarized revenues and expenses information for Canadian Travel Inc. for the year 2018 states:1cost of goods sold CAD180,000, sales revenue CAD400,000, other (non-operating) revenues and gainsCAD30,000, sales general and administration expenses of CAD100,000. Net interest income is (+)CAD10,000 and the corporate income tax rate is 26,50%: Prepare the Income (i.e. Pro…t & Loss) Statement of Holiday Inc., showing Gross Pro…t, OperatingPro…t, Other gains/(losses), Earnings before Interest and Tax (EBIT), Pro…t before Tax and NetIncome i.e. Net Pro…t. Point out and explain which of all these revenue and expense items may imply/include non-cashtransactions or accounting records. If the ending balance in Retained Earnings on Canadian Travel Inc.’s 31. Dec 2017 balance sheetwas $1,000,000 and a cash dividend of $10,000 was paid in 2018, using the above information showthe balance sheet entries of Retained Earnings as of 31. Dec 2018.In addition to the above, assume that Canadian…

Lancer Company's preliminary income statement for 2021 and its reported income statement for 2020 are given below. 2021 2020 1,350,000 (648,0001 702,000 (172,500) (162.000 367.500 Sales Revenues 1,320,000 (630.000 690,000 Cost of Goods Sold Gross Profit Depreciation Other Expenses (172,500) (153.000 364.500 Net Income Lancer's records reveal the following information: (1) Lancer neglected to record S8,000 of supplies expense at the end of 2020, so the supplies inventory was overstated at the end of 2020. Consequently, the supplies expense computed for 2021 included the additional amount of supplies used in 2020. (2) On 1/1/19, Lancer purchased a machine for $120,000. Although the machine was expected to have an eight-year life, it was erroneously expensed in recording the purchase. The appropriate depreciation method for this machine is double-declining-balance with no residual. (3) At the end of 2021, Lancer decided to change its inventory costing method from the FIFO costing method…

Agro Co.’s income statement for the year ended 31 March 2019 and statements of financial position at 31 March 2019 and 2018 were as follows: Agro Co.: Income Statement for the year ended 31 March 2019 £'000 Sales 3495 Cost of Sales (2182) Gross profit 1313 Other income: interest received 33 Distribution costs (187) Administrative expenses (309) Interest costs (75) Profit before tax 775 Income tax expense (157) Profit for the year 618 Agro Co.: Statements of Financial Position as at 31 March 2019 and 2018 2019 2018 £'000 £'000 Non-current assets Property, plant and equipment (PPE) 1700 1615 Intangible assets 425 375 Investments 0 95 Current assets Inventory 150 102 Trade receivables 1010 315 Short-term investments 75 0 Cash at Bank 452 1 Total Assets 3812 2503 Current liabilities Trade payables 289 119 Bank overdraft 143 98 Taxation 312 285 744 502 Non-current liabilities Long-term loans 170 50 Total Net Assets 2898 1951 Equity Share capital (£1 ordinary shares) 1950 1550 Share premium…

Judon Corp. provides the following information from its annual report. Assume all revenues are credit sales. The cost of revenues can be used as an approximation of the company's purchases for the year. Revenues  $ 546,190 Cost of revenues  $ 340,275 Inventories as of 31 January 2022  $44,064 Inventories as of 31 January 2021  $41,020 Accounts payable as at 31 January 2022  $58,600 Accounts payable as at 31 January 2021  $51,800 Accounts receivable as at 31 January 2022  $7,482 Accounts receivable as at 31 January 2021  $5,434   Compute the following financial ratios for Judon Corp for 2022 1. Account Receivable Turnover Ratio (Times)? 2. Collection Interval (DSO) / Days? 3. Inventory Turnover Ratio (Times) ? 4. Holding Interval (Days) ? 5. Account Payable  Turnover Ratio (Times)? 6.Payment Interval (Days)? 7. Does Judon Corp need short-term financing?

Agro Co.’s income statement for the year ended 31 March 2019 and statements of financial position at 31 March 2019 and 2018 were as follows: Agro Co.: Income Statement for the year ended 31 March 2019 £'000 Sales 3495 Cost of Sales (2182) Gross profit 1313 Other income: interest received 33 Distribution costs (187) Administrative expenses (309) Interest costs (75) Profit before tax 775 Income tax expense (157) Profit for the year 618 Agro Co.: Statements of Financial Position as at 31 March 2019 and 2018 2019 2018 £'000 £'000 Non-current assets Property, plant and equipment (PPE) 1700 1615 Intangible assets 425 375 Investments 0 95 Current assets Inventory 150 102 Trade receivables 1010 315 Short-term investments 75 0 Cash at Bank 452 1 Total Assets 3812 2503 Current liabilities Trade payables 289 119 Bank overdraft 143 98 Taxation 312 285 744 502 Non-current liabilities Long-term loans 170 50 Total Net Assets 2898 1951 Equity Share capital (£1 ordinary shares) 1950 1550 Share premium…

Judon Corp. provides the following information from its annual report. Assume all revenues are credit sales. The cost of revenues can be used as an approximation of the company's purchases for the year. Revenues  $ 546,190 Cost of revenues  $ 340,275 Inventories as of 31 January 2022  $44,064 Inventories as of 31 January 2021  $41,020 Accounts payable as at 31 January 2022  $58,600 Accounts payable as at 31 January 2021  $51,800 Accounts receivable as at 31 January 2022  $7,482 Accounts receivable as at 31 January 2021  $5,434   Compute the following financial ratios for Judon Corp for 2022 1. Account Receivable Turnover Ratio (Times)? 2. Collection Interval (DSO) / Days? 3. Inventory Turnover Ratio (Times) ? 4. Holding Interval (Days) ? 5. Account Payable  Turnover Ratio (Times)? 6.Payment Interval (Days)? 7. Does Judon Corp need short-term financing?  8. Using the information provided, compute the change in operating working captial

The data shown below were obtained from the financial records of the BST Corporation for the year ended December 31, 2020. Sound Break Corporation Income and Retained Earnings Statement For the year Ended December 31, 2020 Net Sales P1,000,000 Cost of Goods Sold: Inventory, Dec. 31, 2019 P250,000 Purchases 720,000 Total Goods Available P970,000 Inventory 220,000 750,000 Gross Margin on Sales Selling and Administrative (including P 250,000 Depreciation of P20,000) 125,000 Net Income before Tax P 125,000 Provision for Income Tax 35,000 Net Income for the Year P 90,000 Retained Earnings, beginning 130,000 Total P 220,000 Dividends Paid 30,000 Retained Earnings, December 31, 2020 P 190,000 Sound Break Corporation BALANCE SHEET December 31, 2019 and 2020 ASSETS 2019 2020 Current Assets: Cash P 75,000 P 85,000 Marketable Securities 25,000 25,000 Trade Receivables, net 185,000 245,000 Inventory, at cost 250,000 220,000 Prepaid Expenses 15,000 10,000 Total Current Assets P550,000 P585,000…

During 2021,  Blossom Inc. has the following account balances in Income Statement:   Sales 1,630,245 Cost of Sales 646,788 Selling Expense 235,500 Administrative Expense 114,766 Other Expense 57,146 Income Tax Expense 200,400 Other Revenue 65,800   What will be the Net income?

Required information [The following information applies to the questions displayed below.] Jordan Sales Company (organized as a corporation on April 1, 2017) has completed the accounting cycle for the second year, ended March 31, 2019. Jordan also has completed a correct trial balance as follows: JORDAN SALES COMPANY Trial Balance At March 31, 2019 Account Titles Debit Credit Cash $ 58,000 Accounts receivable 49,000 1,000 34,000 Office supplies inventory Automobiles (company cars) Accumulated depreciation, automobiles Office equipment Accumulated depreciation, office equipment Accounts payable Income taxes payable Salaries and commissions payable Note payable, long-term Capital stock (par $1; 33,000 shares) Paid-in capital Retained earnings (on April 1, 2018) Dividends declared and paid during the current year Sales revenue $ 14,000 3,000 1,000 22,000 2,000 33, 0өө 33,000 5,000 7,500 10,500 99,000 Cost of goods sold Operating expenses (detail omitted to conserve time) Depreciation…

Rousseau Corporation has the following Statement of Income for the year ended May 31, 2020: Sales... $1,675,200 Cost of goods sold.. 887,600 Gross margin... 787,600 Selling & administrative expense.. 241,200 Interest expense. 65,000 Income before income taxes. 481,400 192,500 $288,900 Income taxes.. Net income.... Calculate the interest-coverage ratio for Rousseau Corporation for May31, 2020 (place answer at up to 2 decimal places in the space below). 신

BCD Company had sales Revenue of $500,000 for the year 2019. Its cost of goods sold was $240,000, and its operating expenses were $50,000, and administrative expenses $ 25,000. Interest revenue for the year is $5,000 of which $2000 is unearned and interest expense was $12,000. BCD’s income tax rate is 25%. Required:                                                                                                                                                         Prepare a classified multiple-step income statement for the year for BCD Company.

Wilton Felder Ltd is finalising its financial statements for the year ended 31 October 2024. You are presented with the following information: Income statement for the year ended 31 October 2024 £ 175,900 Sales revenue Cost of Sales (99,370) Gross profit 76,530 Operating expenses Interest income (51,280) 40 1,400 Finance costs Profit before tax 23,890 Corporation tax expenses (6,450) Profit for the year 17,440 Balance sheets as at 31 October Non-current assets Property plant & equipment at cost Less Accumulated Depreciation Current Assets Inventory Trade receivable Cash at bank and in hand Total assets Current liabilities Trade and other payables Corporation tax payable Non-current liabilities Bank Loans Net assets Equity Share capital Share premium Retained earnings Total equity 31/10/24 £ 132,040 (32,210) 99,830 24,130 17,520 4,220 45,870 145,700 20,060 5,270 25,330 28,320 92,050 24,410 13,800 53,840 92,050 31/10/23 £ 111,580 (28,870) 82,710 27,220 11,740 2,140 41,100 123,810 17,860…