accounting hw

wphw1.docx

Home >Business & Finance homework help >Accounting homework help >accounting hw

HW 1

(Computation of Net Income)

Presented below are changes in all the account balances of Jackson Furniture Co. during the current year, except for retained earnings.

	Increase (Decrease)	Increase (Decrease)
Cash	$83,310	Accounts Payable	$(59,290)
Accounts Receivable (net)	46,620	Bonds Payable	84,140
Inventory	133,170	Common Stock	125,350
Investments	(49,380)	Additional Paid-in Capital	15,800

Compute the net income for the current year, assuming that there were no entries in the Retained Earnings account except for net income and a dividend declaration of $24,640 which was paid in the current year.

(Income Statement Items)

Presented below are certain account balances of Paczki Products Co.

Rental revenue	$6,810	Sales discounts	$7,980
Interest expense	12,910	Selling expenses	99,890
Beginning retained earnings	114,500	Sales	390,550
Ending retained earnings	134,230	Income tax	31,800
Dividend revenue	72,590	Cost of goods sold	185,470
Sales returns	12,550	Administrative expenses	82,980

From the foregoing, compute the following in a periodic inventory environment: (a) total net revenue, (b) net income, (c) dividends declared during the current year.

(a)

Total net revenue

(b)

Net income

(c)

Dividends declared

(Multiple-step and Extraordinary Items)

The following balances were taken from the books of Parnevik Corp. on December 31, 2012.

Interest revenue	$92,800	Accumulated depreciation-building	28,000
Cash	51,000	Notes receivable	155,000
Sales	1,341,100	Selling expenses	201,400
Accounts receivable	150,000	Accounts payable	170,000
Prepaid insurance	20,000	Bonds payable	100,000
Sales returns and allowances	156,000	Administrative and general expenses	97,300
Allowance for doubtful accounts	7,000	Accrued liabilities	32,000
Sales discounts	52,500	Interest expense	73,100
Land	100,000	Notes payable	100,000
Equipment	200,000	Loss from earthquake damage
Building	140,000	(extraordinary item)	130,000
Cost of goods sold	629,400	Common stock	500,000
Accumulated depreciation-equipment	40,000	Retained earnings	21,000

Assume the total effective tax rate on all items is 34%.

Prepare a multiple-step income statement; 100,000 shares of common stock were outstanding during the year. (Round per share of common stock to 2 decimal places, e.g. 0.25 and all other answers to zero decimal places, e.g. 2,250. For per share of common stock use either a negative sign preceding the number, e.g. -0.45 or parenthesis e.g. (0.45) for negative numbers. Enter all other amounts as positive amounts and subtract where necessary. For multiple entries list from largest to smallest amounts, e.g. 10, 5, 1.)

PARNEVIK CORP.
Income Statement
For the Year Ended December 31, 2012
Sales Revenue
		$
Less:	$

Net sales revenue

Gross profit

Operating Expenses


Income from operations

Other Revenues and Gains


Other Expenses and Losses

Income before taxes and extraordinary item

Income before extraordinary item
Extraordinary item
Loss from earthquake damage
Less applicable tax reduction
Net income		$

Per share common stock:
Income before extraordinary item		$
Extraordinary item
Net income		$

(Retained Earnings Statement)

McEntire Corporation began operations on January 1, 2009. During its first 3 years of operations, McEntire reported net income and declared dividends as follows.

	Net income	Dividends declared
2009	$48,500	$ -0-
2010	129,700	58,200
2011	160,100	54,600

The following information relates to 2012.

	Income before income tax	$245,000
	Prior period adjustment: understatement of 2010 depreciation expense (before taxes)	$26,100
	Cumulative decrease in income from change in inventory methods (before taxes)	$41,400
	Dividends declared (of this amount, $25,000 will be paid on Jan. 15, 2013)	$100,000
	Effective tax rate	40%

(a)

Prepare a 2012 retained earnings statement for McEntire Corporation. (Enter all amounts as positive amounts and subtract where necessary.)

McENTIRE CORPORATION
Retained Earnings Statement
For the Year Ended December 31, 2012
	$
Correction for depreciation error (net of taxes)

Balance, January 1, as adjusted
Add:

Deduct:
Balance, December 31	$

(b)

Assume McEntire Corp. restricted retained earnings in the amount of $70,000 on December 31, 2012. After this action, what would McEntire report as total retained earnings in its December 31, 2012, balance sheet?

Total retained earnings

(Earnings per Share)

At December 31, 2011, Schroeder Corporation had the following stock outstanding.

	8% cumulative preferred stock, $100 par, 108,172 shares	$10,817,200
	Common stock, $5 par, 4,031,160 shares	20,155,800

During 2012, Schroeder's did not issue any additional stock. The following also occurred during 2012.

	Income from continuing operations before taxes	$31,109,600
	Discontinued operations (loss before taxes)	3,277,800
	Preferred dividends declared	865,376
	Common dividends declared	2,284,000
	Effective tax rate	35%

Compute earnings per share data as it should appear in the 2012 income statement of Schroeder Corporation. (Round answers to 2 decimal place, e.g. 5.25. For negative numbers use either a negative sign preceding the number, e.g. -0.45 or parenthesis, e.g. (0.45).)

Earnings per share

		$

	Net income	$

(Comprehensive Income)

Armstrong Corporation reported the following for 2012: net sales $1,216,800; cost of goods sold $769,100; selling and administrative expenses $348,900; and an unrealized holding gain on available-for-sale securities $20,300.

Prepare a statement of comprehensive income, using the two-income statement format. Ignore income taxes and earnings per share. (Enter all amounts as positive amounts and subtract where necessary.)

ARMSTRONG CORPORATION
Income Statement and Statement of Comprehensive Income
For the Year Ended December 31, 2012
	$

Gross Profit

Net income	$

Net income	$
Unrealized holding gain
Comprehensive income	$