Question
In: Accounting
Problem 4-6 Below is the Retained Earnings account for the year 2017 for Pronghorn Corp. Retained...
Problem 4-6
Below is the Retained Earnings account for the year 2017 for Pronghorn Corp.
| Retained earnings, January 1, 2017 |
$265,330 |
|||
| Add: | ||||
| Gain on sale of investments (net of tax) |
$48,930 |
|||
| Net income |
92,230 |
|||
| Refund on litigation with government, related to the year 2014 (net of tax) |
29,330 |
|||
| Recognition of income earned in 2016, but
omitted from income statement in that year (net of tax) |
33,130 |
203,620 |
||
|
468,950 |
||||
| Deduct: | ||||
| Loss on discontinued operations (net of tax) |
42,730 |
|||
| Write-off of goodwill (net of tax) |
67,730 |
|||
| Cumulative effect on income of prior years in
changing from LIFO to FIFO inventory valuation in 2017 (net of tax) |
30,930 |
|||
| Cash dividends declared |
39,730 |
181,120 |
||
| Retained earnings, December 31, 2017 |
$287,830 |
(a) Prepare a corrected retained earnings
statement. Pronghorn Corp. normally sells investments of the type
mentioned above. FIFO inventory was used in 2017 to compute net
income. (List items that increase adjusted retained
earnings first.)
Solutions
ekkarill92 answered 2 years agoRelated Solutions
The following information is related to Pronghorn Company for 2017. Retained earnings balance, January 1, 2017...
The following information is related to Pronghorn Company for
2017.
Retained earnings balance, January 1, 2017
$985,470
Sales Revenue
26,100,500
Cost of goods sold
16,248,000
Interest revenue
76,300
Selling and administrative expenses
4,796,300
Write-off of goodwill
839,700
Income taxes for 2017
1,349,100
Gain on the sale of investments
115,500
Loss due to flood damage
398,800
Loss on the disposition of the wholesale division (net of
tax)
451,200
Loss on operations of the wholesale division (net of tax)
91,620
Dividends declared...
Problem 4-1 The following information is related to Flint Company for 2017. Retained earnings balance, January...
Problem 4-1
The following information is related to Flint Company for
2017.
Retained earnings balance, January 1, 2017
$989,040
Sales Revenue
26,170,900
Cost of goods sold
16,226,200
Interest revenue
77,000
Selling and administrative expenses
4,772,600
Write-off of goodwill
829,100
Income taxes for 2017
1,349,000
Gain on the sale of investments
117,100
Loss due to flood damage
392,900
Loss on the disposition of the wholesale division (net of
tax)
455,300
Loss on operations of the wholesale division (net of tax)
93,560...
the balance in retained earnings at the end of the year is determined by retained earnings...
the balance in retained earnings at the end of the year is
determined by retained earnings balance at the ''beginning of the
year:
a. plus revenues, minus liabilities
b. plus net income, minus dividends
c. plus assets, minus liabilities
d. plus accounts, minus deferrals
Problem 4-4 The following account balances were included in the trial balance of Pronghorn Corporation at...
Problem 4-4
The following account balances were included in the trial balance
of Pronghorn Corporation at June 30, 2017.
Sales revenue
$1,589,330
Depreciation expense (office furniture and equipment)
$6,697
Sales discounts
32,770
Property tax expense
7,616
Cost of goods sold
898,500
Bad debt expense (selling)
5,289
Salaries and wages expense (sales)
56,960
Maintenance and repairs expense (administration)
9,928
Sales commissions
99,050
Office expense
5,690
Travel expense (salespersons)
35,000
Sales returns and allowances
57,492
Delivery expense
22,220
Dividends received
35,470
Entertainment...
Problem 4-4 The following account balances were included in the trial balance of Pronghorn Corporation at...
Problem 4-4 The following account balances were included in the
trial balance of Pronghorn Corporation at June 30, 2017. Sales
revenue $1,589,100 Depreciation expense (office furniture and
equipment) $7,364 Sales discounts 32,320 Property tax expense 7,162
Cost of goods sold 903,300 Bad debt expense (selling) 5,229
Salaries and wages expense (sales) 57,960 Maintenance and repairs
expense (administration) 8,940 Sales commissions 98,100 Office
expense 6,140 Travel expense (salespersons) 34,000 Sales returns
and allowances 62,236 Delivery expense 23,400 Dividends received
39,100 Entertainment...
4. The cost of retained earnings If a firm cannot invest retained earnings to earn a...
4.
The cost of retained earnings
If a firm cannot invest retained earnings to earn a rate of
return (insert answer here) the required rate of return on retained
earnings, it should return those funds to its stockholders.
The cost of equity using the CAPM approach
The current risk-free rate of return (rRFrRF) is 3.86% while the
market risk premium is 5.75%. The D’Amico Company has a beta of
1.56. Using the capital asset pricing model (CAPM) approach,
D’Amico’s cost...
4. The cost of retained earnings If a firm cannot invest retained earnings to earn a...
4. The cost of retained earnings
If a firm cannot invest retained earnings to earn a rate of
return __________the required rate of return on retained earnings,
it should return those funds to its stockholders.
The cost of equity using the CAPM approach
The current risk-free rate of return (rRFrRF) is 4.23% while the
market risk premium is 6.17%. The Wilson Company has a beta of
0.78. Using the capital asset pricing model (CAPM) approach,
Wilson’s cost of equity is...
Problem 4-5 (Essay) Presented below is a combined single-step income and retained earnings statement for Nerwin...
Problem 4-5 (Essay) Presented below is a combined single-step
income and retained earnings statement for Nerwin Company for 2017.
(000 omitted) Net sales $640,000 Costs and expenses Cost of goods
sold $500,000 Selling, general, and administrative expenses 66,000
Other, net 17,000 583,000 Income before income tax 57,000 Income
tax 19,400 Net income 37,600 Retained earnings at beginning of
period, as previously reported 141,000 Adjustment required for
correction of error (7,000 ) Retained earnings at beginning of
period, as restated 134,000...
Pronghorn Corp. purchased a machine on July 1, 2017, for $32,000. Pronghorn paid $290 in title...
Pronghorn Corp. purchased a machine on July 1, 2017, for
$32,000. Pronghorn paid $290 in title fees and a legal fee of $300
related to the machine. In addition, Pronghorn paid $500 in
shipping charges for delivery, and paid $600 to a local contractor
to build and wire a platform for the machine on the plant floor.
The machine has an estimated useful life of 10 years, a total
expected life of 12 years, a residual value of $6,000, and...
Wich Corp. had additions to retained earnings for the year just ended of $312,834. The firm...
Wich Corp. had additions to retained earnings for the year just
ended of $312,834. The firm paid out $214,429 in cash dividends,
and it has ending total equity of $4,871,346. The company currently
has 150,000 shares of common stock outstanding.
If the stock currently sells for $88 per share, what is the
price-earnings ratio? (round 4 decimal places)
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