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P 4-1 (a)
For the Year Ended 2010
Revenue
Gross Sales 1,000,000.00
Less: Sales Returns and Allowances 0.00
Net Sales 1,000,000.00
Expenses
Administrative Expense 62,000.00
Interest Expense 20,000.00
Selling Expense 43,000.00
Total Expenses 125,000.00
Other Income
Dividend Income 10,000.00
Total Other Income 10,000.00
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Income Statement
P 4-1 (c) Decher Automotive
For the Year Ended 2010
Revenue
Gross Sales 1,000,000.00
Other Income 10,000.00
Net Sales 1,010,000.00
Expenses
COGS 670,000.00
Operating expenses 125,000.00
Income Tax 100,000.00
Flood Loss (Net of Tax) 30,000.00
Net Income 85,000.00
Income Statement
P 4-2 Lasky Corporation
For the Year Ended Dec 31, 2010
Revenue
Gross Sales 362,000.00
Net Sales 362,000.00
Expenses
Administrative and General Expense 11,400.00
Interest Expense 2,200.00
Selling Expense 47,000.00
Total Expenses 60,600.00
Other Income
Rental Income 1,000.00
Interest Income 2,400.00
Total Other Income 3,400.00
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Income Statement
P 4-3 Consolidated Can
For The Year Ended Dec 31, 2010
Revenue
Gross Sales 480,000.00
Net Sales 480,000.00
Expenses
Administrative and Selling Expense 42,000.00
Interest Expense 8,700.00
Total Expenses 50,700.00
Other Income
Other Income 1,600.00
Total Other Income 1,600.00
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Income Statement
P 4-4 (a) Tapeline Corporation
For the Year Ended Dec 31, 2010
Revenue
Gross Sales 670,000.00
Rental Income 3,600.00
Gain on Sale of Fixed Assets 3,000.00
Net Revenue 676,600.00
Expenses
Cost of Sales 300,000.00
Administrative and General Expense 110,000.00
Selling Expense 97,000.00
Depreciation Expense 10,000.00
Interest Expense 1,900.00
Total Expenses 518,900.00
Taxation
Corporate Tax (40%) 63,080.00
Extraordinary Loss (Casualty Loss) 30,000.00
Less: Tax Savings 12,000.00
Net Income 76,620.00
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Income Statement
P 4-4 (b) Tapeline Corporation
For the Year Ended Dec 31, 2010
Revenue
Gross Sales 670,000.00
Net Sales 670,000.00
Expenses
Administrative and General Expense 110,000.00
Interest Expense 1,900.00
Depreciation Expense 10,000.00
Selling Expense 97,000.00
Total Expenses 218,900.00
Other Income
Rental Income 3,600.00
Gain on Sale of Fixed assets 3,000.00
Total Other Income 6,600.00
Answer P 4-5
Not Solved
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Answer P 4-6
1) Sales is 2 million Because Administrative is 20% of Cost of Goods Sold which is 1
Million and 10% of Sales, therefore sales is 2 million.
2) From the above solution, we can estimate Admin Expense which is 10% of sales
40,00,000 x 10% = 400,000.
3) Selling Expense is 150% of 400,000 which is equal to 600,000.
4) Bonds payables interest expense is 110,000 (10,00,000 x 11%).
Income Statement
P 4-6
For the Year Ended Dec 31, 2010
Revenue
Gross Sales 4,000,000.00
Net Sales 4,000,000.00
Expenses
Administrative Expense 400,000.00
Selling Expense 600,000.00
Interest Expense 110,000.00
Total Expenses 1,110,000.00
Taxation
Income Taxes (48%) 427,200.00
Earning After Income Tax 427,200.00
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Answer P 4-7
Total revenues from regular operations $832,000
Total expenses from regular operations (776,000)
Income from operations 56,000
Extraordinary gain, net of tax _ 30,000_
Net Income 86,000
The following data will be shown in Financial Statements as:
Earnings Per Share (86000/10000) 8.60
Answer P 4-8
Not Solved
Answer P 4-11
a) Net Income + Extra Ordinary losses from Flood
20,000 + 120,000 = 140,000
b) 60000
c) 60000
d) 40000
e) 50000
Answer P 4-12
a. Net income from operations
b. 20,000 Loss
c. 94,000
-30,000
-50,000
+25,000
39,000
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