Intermediate Accounting
9th Edition
ISBN: 9781259722660
Author: J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher: McGraw-Hill Education
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Chapter 4, Problem 4.1E
Operating versus Nonoperating Income
• LO4–1
Pandora Corporation operates several factories in the Midwest that manufacture consumer electronics. The December 31, 2018, year-end
| Account Title | Debits | Credits |
| Sales revenue | 12,500,000 | |
| Interest revenue | 50,000 | |
| Loss on sale of investments | 100,000 | |
| Cost of goods sold | 6,200,000 | |
| Selling expenses | 620,000 | |
| General and administrative expenses | 1,520,000 | |
| Interest expense | 40,000 | |
| Research and development expense | 1,200,000 | |
| Income tax expense | 900,000 |
Required:
Calculate the company’s operating income for the year.
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Exercise 9-12 (Algo) Calculate gross profit, cost of goods sold, and selling price LO 9-2, 9-3
MBI Incorporated had sales of $36 million for fiscal 2022. The company's gross profit ratio for that year was 26%.
Required:
a. Calculate the gross profit and cost of goods sold for MBI for fiscal 2022.
b. Assume that a new product is developed and that it will cost $488 to manufacture. Calculate the selling price that must be set for
this new product if its gross profit ratio is to be the same as the average achieved for all products for fiscal 2022.
c. From a management viewpoint, it could use the estimated selling price as a "target" in conducting marketing research studies to
assess its ultimate prospects for success at this price.
Complete this question by entering your answers in the tabs below.
Required A Required B
Required C
Calculate the gross profit and cost of goods sold for MBI for fiscal 2022.
Note: Enter your answers in millions rounded to 2 decimal places. (i.e., 5,500,000…
Chapter 17
Revenue and expense data for the current calendar year for Smith Electronics Company and for the
electronics industry are as follows. The Smith Electronics Company data are expressed in dollars. The
electronics Industry averages are expressed in percentages.
Smith
Electronics
Electronics
Industry
Company
Average
$3,142,000
103.0%
Sales
3.0%
150,000
Sales returns and allowances
$2,992,000
100.0%
Net sales
60.0%
1,850,000
Cost of goods sold
40.0%
$1,142,000
Gross profit
$750,000
23.0%
Selling expenses
257,000
10.0%
Administrative expenses
33.0%
$1,007,000
Total operating expenses
7.0%
$135,000
Operating income
Other income
50,000
1.5%
$185,000
8.5%
42,500
1.0%
Other expense
Income before income tax
$142,500
7.5%
Income tax expense
5.0%
76,000
$66,500
Net Income
2.5%
a. Prepare a common-sized income statement comparing the results of operations for Smith
Electronics Company with the industry average Round to one decimal place.
b. As far as the data permit, comment on…
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Required information
[The following information applies to the questions displayed below.]
Westerville Company reported the following results from last year's operations:
Sales
Variable expenses
Contribution margin
Fixed expenses
Net operating income
Average operating assets
$ 1,400,000
680,000
720,000
440,000
$ 280,000
$875,000
At the beginning of this year, the company has a $300,000 investment opportunity with the following cost and revenue
characteristics:
Sales
$ 480,000
Contribution margin ratio
Fixed expenses
80 % of sales
$ 336,000
The company's minimum required rate of return is 15%.
5. What is the turnover related to this year's investment opportunity?
Note: Round your answer to 1 decimal place.
Turnover
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,...
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