Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN: 9781337788281
Author: James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher: Cengage Learning
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Textbook Question
Chapter 5, Problem 17E
Income Statement and
The following information is also available for 2019 and is not reflected in the preceding accounts:
- 1. The common stock has been outstanding all year. A cash dividend of $1.28 per share was declared and paid.
- 2. Land was sold at a pretax gain of $6,300.
- 3. Division X (a major component of the company) was sold at a pretax gain of $4,700. It had incurred a $9,500 pretax operating loss during 2019.
- 4. A tornado, which is an unusual event in the area, caused a $5,400 pretax loss.
- 5. The income tax rate on all items of income is 30%.
- 6. The average shareholders’ equity is $90,000.
Required:
- 1. Prepare a 2019 multiple-step income statement for Huff.
- 2. Prepare a 2019 retained earnings statement.
- 3. Compute the 2019 return on common equity (Net Income 4 Average Shareholders’ Equity).
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Income Statement and Retained Earnings
The Huff Company presents the following partial list of account balances taken from its December 31, 2019 adjusted trial balance:
Sales (net)
$124,000 Operating expenses
$26,300
Interest expense
4,600 Common stock, $5 par
16,500
Cost of goods sold
53,000 Retained earnings, 1/1/2019
41,700
The following information is also available for 2019 and is not reflected in the preceding accounts:
1. The common stock has been outstanding all year. A cash dividend of $1.04 per share vas declared and paid.
2. Land was sold at a pretax gain of $5,900.
3. Division X (a major component of the company) vas sold at a pretax gain of $4,670. It had incurred a $9,470 pretax operating loss during 2019.
4. A tornado, which is an unusual event in the area, caused a $5,310 pretax loss.
5. The income tax rate on all items of income is 30%.
6. The average shareholders' equity is $89,000.
Required:
1. Prepare a 2019 multiple-step income statement for Huff. Round earnings…
Income Statement, Lower Portion
At the beginning of 2019, Cameron Company's retained earnings was $239,400. For 2019, Cameron has calculated its pretax income from continuing operations to be $158,400. During 2019, the following events also occurred:
1. During July, Cameron sold Division M (a component of the company). It has determined that the pretax income from the operations of Division M during 2019 totals $46,800 and that a pretax loss of $47,600 was incurred on the sale of Division M.
2. Cameron had 28,000 shares of common stock outstanding during all of 2019. It declared and paid a $2 per share cash dividend on this stock.
Required:
Assuming that all the pretax items are subject to a 30% income tax rate:
1. Complete the lower portion of Cameron's 2019 income statement, beginning with "Pretax Income from Continuing Operations." Round earnings per share computations to two decimal places.
CAMERON COMPANY
Partial Income Statement
For Year Ended December 31, 2019
Pretax income from…
Income Statement, Lower Portion
Cunningham Company reports a retained earnings balance of $370,200 at the beginning of 2019. For the year ended December 31, 2019, the company reports pretax income from continuing operations of $156,000. The following information is also available pertaining to 2019:
1. The company declared and paid a $0.70 cash dividend per share on the 30,000 shares of common stock that were outstanding the entire year.
2. The company incurred a pretax $21,000 loss as a result of an earthquake, which is not unusual for the area.
This is included in the $156,000 income from continuing operations.
3. The company sold Division P (a component of the company) in May. From January through May, Division P had incurred a pretax loss from operations of $33,000. A pretax gain of $15,000 was recognized on the sale of Division P.
Required:
Assuming that all the "pretax" items are subject to a 30% income tax rate:
1. Complete the lower portion of Cunningham's 2019 income statement…
Chapter 5 Solutions
Intermediate Accounting: Reporting And Analysis
Ch. 5 - In general, how does the income statement help...Ch. 5 - Prob. 2GICh. 5 - Define income under the capital maintenance...Ch. 5 - Prob. 4GICh. 5 - What is net income?Ch. 5 - What three things must a company determine to...Ch. 5 - Prob. 7GICh. 5 - Prob. 8GICh. 5 - Give an example and explanation for each of the...Ch. 5 - Define expenses. What do expenses measure?
Ch. 5 - Prob. 11GICh. 5 - Define gains and losses. Give examples of three...Ch. 5 - Prob. 13GICh. 5 - What items are included in a companys income from...Ch. 5 - How are unusual or infrequent gains or losses...Ch. 5 - What is interperiod tax allocation?Ch. 5 - Prob. 17GICh. 5 - Prob. 18GICh. 5 - Prob. 19GICh. 5 - Prob. 20GICh. 5 - Prob. 21GICh. 5 - Prob. 22GICh. 5 - Prob. 23GICh. 5 - Prob. 24GICh. 5 - Prob. 25GICh. 5 - Prob. 26GICh. 5 - Prob. 27GICh. 5 - Prob. 28GICh. 5 - Prob. 29GICh. 5 - Prob. 30GICh. 5 - What is the rate of return on common equity? What...Ch. 5 - Prob. 32GICh. 5 - Prob. 33GICh. 5 - Which of the following is expensed under the...Ch. 5 - The following information is available for Cooke...Ch. 5 - The following information is available for Wagner...Ch. 5 - Prob. 4MCCh. 5 - A loss from the sale of a component of a business...Ch. 5 - In a statement of cash flows, receipts from sales...Ch. 5 - Brandt Corporation had sales revenue of 500,000...Ch. 5 - Refer to RE5-1. Prepare a single-step income...Ch. 5 - Shaquille Corporation began the current year with...Ch. 5 - Dorno Corporation incurred expenses during the...Ch. 5 - Niler Corporation reported the following after-tax...Ch. 5 - Jordan Corporation reported retained earnings of...Ch. 5 - Prob. 7RECh. 5 - Prob. 8RECh. 5 - Amelias Bookstore reported net income of 62,000...Ch. 5 - Prob. 10RECh. 5 - Prob. 1ECh. 5 - Cost of Goods Sold and Income Statement Schuch...Ch. 5 - Income Statement Calculation OConnor Companys...Ch. 5 - Results of Discontinued Operations On November 30,...Ch. 5 - Multiple-Step and Single-Step In coin Statements...Ch. 5 - Prob. 6ECh. 5 - Multiple-Step and Single-Step Income Statements,...Ch. 5 - Cost of Goods Sold, Income Statement. and...Ch. 5 - Net Cash Flow from Operating Activities The...Ch. 5 - Prob. 10ECh. 5 - Statement of Cash Flows The following items...Ch. 5 - Statement of Cash Flows The following are several...Ch. 5 - Classifications Where would each of the following...Ch. 5 - Rate of Change nalyses eiher Company presents the...Ch. 5 - Prob. 15ECh. 5 - Prob. 16ECh. 5 - Income Statement and Retained Earnings Huff...Ch. 5 - Prob. 18ECh. 5 - Interim Reporting (Appendix 5.1) Miller Company...Ch. 5 - Prob. 1PCh. 5 - Prob. 2PCh. 5 - Income Statement, Lower Portion Cunningham Company...Ch. 5 - Financial Statement Violations of U.S. GAAP The...Ch. 5 - Misclassiflcations Rox Corporations multiple-step...Ch. 5 - Misclassifications Olson Companys bookkeeper...Ch. 5 - Complex Income Statement The following items were...Ch. 5 - Prob. 8PCh. 5 - Financial Statement Deficiencies The following is...Ch. 5 - Comprehensive: Balance Sheet from Statement of...Ch. 5 - Net Income and Comprehensive Income At the...Ch. 5 - Statement of Cash Flows A list of Fischer Companys...Ch. 5 - Statement of Cash Flows The following are Mueller...Ch. 5 - Prob. 14PCh. 5 - Rate of Change Analyses and Ratios Analyses The...Ch. 5 - Comprehensive: Income Statement and Retained...Ch. 5 - Comprehensive: Income Statement and Supporting...Ch. 5 - Prob. 18PCh. 5 - Prob. 19PCh. 5 - Prob. 20PCh. 5 - Prob. 1CCh. 5 - Prob. 2CCh. 5 - Prob. 3CCh. 5 - Prob. 4CCh. 5 - Nonrecurring Items Lynn Company sells a component...Ch. 5 - Prob. 6CCh. 5 - Accrual Accounting GAAP requires the use of...Ch. 5 - Ethics and Sale of Operating Component It is the...Ch. 5 - Analyzing Starbuckss Income Statement and Cash...Ch. 5 - Prob. 11C
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- 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 Silvosos return on common equity for 2019? What is your evaluation of Silvosos return on common equity if last year it was 10%?arrow_forwardIncome Statement, Lower Portion Cunningham Company reports a retained earnings balance of 365,200 at the beginning of 2019. For the year ended December 31, 2019, the company reports pretax income from continuing operations of 150,500. The following information is also available pertaining to 2019: 1. The company declared and paid a 0.72 cash dividend per share on the 30,000 shares of common stock that were outstanding the entire year. 2. The company incurred a pretax 21,000 loss as a result of an earthquake, which is not unusual for the area. This is included in the 150,500 income from continuing operations. 3. The company sold Division P (a component of the company) in May. From January through May, Division P had incurred a pretax loss from operations of 33,000. A pretax gain of 15,000 was recognized on the sale of Division P. Required: Assuming that all the pretax items are subject to a 30% income tax rate: 1. Complete the lower portion of Cunningham's 2019 income statement beginning with Pretax Income from Continuing Operations. Include any related note to the financial statements. 2. Prepare an accompanying retained earnings statement.arrow_forwardNet Income and Comprehensive Income At the beginning of 2019, JR Companys shareholders equity was as follows: During 2019, the following events and transactions occurred: 1. JR recognized sales revenues of 108,000. It incurred cost of goods sold of 62,000 and operating expenses of 12,000, 2. JR issued 1,000 shares of its 5 par common stock for 14 per share. 3. JR invested 30,000 in available-for-sale securities. At the end of the year, the securities had a fair value of 35,000. 4. JR paid dividends of 6,000. The income tax rate on all items of income is 30%. Required: 1. Prepare a 2019 income statement for JR which includes net income and comprehensive income ignore earnings per share). 2. For 2016 prepare a separate (a) income statement (ignore earnings per share) and (b) statement of comprehensive income.arrow_forward
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