ABC Manufacturing Inc. Income Statement Year Ended December 31, 20X4 Sale $ 200,000 Cost of goods sold $ 120,000 Gross Profit $ 80,000 Operating Expenses $ 40,000 Loss on Sale of equipment $ 2,000 $ 42,000 Profit from Operations $ 38,000 Other expenses Interest Expense $ 2,000 Profit before Income Tax $ 36,000 Income Tax Expense $ 8,000 ABC Manufacturing Inc. comparative balance sheet at December 31 20X4 20X3 Cash $ 4,500 $ 4,300 Accounts Receivable $ 72,000 $ 6,500 Inventory $ 110,000 $ 140,000 Prepaid Expenses $ 1,550 $ 1,020 Equipment $ 98,000 $ 100,000 Accumulated Depreciation - equipment $ (50,000 ) $ (42,000 Total Assets $ 236,050 $ 209,820 Account Payable $ 15,330 $ 9,900 Interest Payable $ 510 $ 10 Income taxes payable $ 10,800 $ 9,500 Dividends Payable $ 1,800 $ 3,800 Long-term Notes Payable $ 50,000 $ 65,000 Common shares $ 130,000 $ 120,000 Retained Earnings $ 27,610 $ 1,610 Total Liabilities & Shareholders' Equity $ 236,050 $ 209,820 Additional informaiton Operating expenses include depreciation expense of $10,000 Accounts Payable related to the purchase of inventory Equipment that cost $8,000 was sold at a loss of $2,000 New equipment was purchased during the year for $6,000 Dividends declared and paid in 20X4 totaled $2,000 Common shares were sold for $10,000 cash Interest payable in 20X4 was $500 greater than interest payable in 20X3 Total return on assets at December 20X4 was:

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter5: The Income Statement And The Statement Of Cash Flows

Section: Chapter Questions

Problem 1RE: Brandt Corporation had sales revenue of 500,000 for the current year. For the year, its cost of...

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ABC Manufacturing Inc.
Income Statement
Year Ended December 31, 20X4
Sale			$	200,000
Cost of goods sold			$	120,000
Gross Profit			$	80,000
Operating Expenses	$	40,000
Loss on Sale of equipment	$	2,000	$	42,000
Profit from Operations			$	38,000
Other expenses
Interest Expense			$	2,000
Profit before Income Tax			$	36,000
Income Tax Expense			$	8,000

ABC Manufacturing Inc. comparative balance sheet at December 31
	20X4	20X3
Cash	$	4,500		$	4,300
Accounts Receivable	$	72,000		$	6,500
Inventory	$	110,000		$	140,000
Prepaid Expenses	$	1,550		$	1,020
Equipment	$	98,000		$	100,000
Accumulated Depreciation - equipment	$	(50,000	)	$	(42,000
Total Assets	$	236,050		$	209,820

Account Payable	$	15,330		$	9,900
Interest Payable	$	510		$	10
Income taxes payable	$	10,800		$	9,500
Dividends Payable	$	1,800		$	3,800
Long-term Notes Payable	$	50,000		$	65,000
Common shares	$	130,000		$	120,000
Retained Earnings	$	27,610		$	1,610
Total Liabilities & Shareholders' Equity	$	236,050		$	209,820

Additional informaiton

Operating expenses include depreciation expense of $10,000
Accounts Payable related to the purchase of inventory
Equipment that cost $8,000 was sold at a loss of $2,000
New equipment was purchased during the year for $6,000
Dividends declared and paid in 20X4 totaled $2,000
Common shares were sold for $10,000 cash
Interest payable in 20X4 was $500 greater than interest payable in 20X3

Total return on assets at December 20X4 was:

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