Question

In: Accounting

The following information relates to Husk Corn Co. for the year ended December 31, 2018: The...

The following information relates to Husk Corn Co. for the year ended December 31, 2018:

The company tells you that Income from Continuing Operations PRE Taxes is $ 300,000. However, this amount was computed before the company considered these items: (i.e. none of the items listed below are factored into the $300,000)

Restructuring Costs incurred in 2018 were $25,000

When recording depreciation expense for the previous year (2017), they mistakenly recorded depreciation twice for the same asset. The amount of the error was $15,000 after taxes. The error had no effect on the amount of depreciation expense recorded in 2018.

As a result of some stronger credit policies put in place in 2018, Husk Corn Co. decided to reduce the percentage used in the calculation of bad debts expense from 2% of net sales to 1.5% of net sales. These new percentages resulted in bad debt expense of $8,000 for the year-ended 2018. (Again, this change in estimate information is not included as part of the $300,000 above. i.e. there is no bad debt expense included as part of the $300,000 amount.)

On October 1, 2018, the company sold Division B, a major component of the business which had been unprofitable for the past several years. Husk Corn Co. reported a loss of $20,000 on Division B during the first 9 months of the year while it was still in operations. They were able to sell the assets of the division before the end of 2018. However, the sale resulted in a loss of $40,000.

Husk Corn Co. incurred a loss from a write-down of obsolete inventory of $10,000 during 2018.

Gains on foreign currency exchange during 2018 were $20,000, which affects comprehensive income only.

1. What is the correct amount that should appear on the Husk Corn Co. income statement as "Income from Continuing Operations before Taxes"?

2. Prepare the 2018 partial income statement for Husk Corn Co. beginning with "Income from Continuing Operations before Taxes" and ending with "Net Income". Assume that your answer in part 1 above was $250,000 for purposes of this question. Assume an income tax rate of 25%. Do not complete the comprehensive income portion.

3. Assuming there are $50,000 shares of common stock outstanding at year-end, what is Husk Corn Co's net income per share (EPS)?

Show all work please.

Solutions

Expert Solution

Answer :


Related Solutions

The following information relates to Husk Corn Co. for the year ended December 31, 2018: The...
The following information relates to Husk Corn Co. for the year ended December 31, 2018: The company tells you that Income from Continuing Operations PRE Taxes is $ 300,000. However, this amount was computed before the company considered these items: (i.e. none of the items listed below are factored into the $300,000) Restructuring Costs incurred in 2018 were $25,000 When recording depreciation expense for the previous year (2017), they mistakenly recorded depreciation twice for the same asset. The amount of...
The following information relates to Walnut Ltd. for the year ended December 31, 2013: Sales                          &nbsp
The following information relates to Walnut Ltd. for the year ended December 31, 2013: Sales                                                                                                         $3,500,000 Purchases: Direct materials                                                                                   $700,000 Indirect materials                                                                                 $50,000 Office supplies                                                                                     $20,000       Salaries                                                                                                      $500,000 * Direct labour                                                                                              $800,000       Rent                                                                                                          $100,000 *       Utilities                                                                                                     $80,000 *       Advertising and promotional                                                                     $30,000       Inventories:                             Dec. 31, 2012                      Dec. 31, 2013 Direct materials                $45,000                                $62,000 Indirect materials                 -----                                  $ 9,000 Office supplies                  $1,000                                     ----- Work-in-process               $4,100                                   $3,300 Finished goods                  $90,000                                 $81,700 *Of these costs, 80 % are assigned to manufacturing activities and the remainder pertain to selling and administrative functions.                         (Assume that there is no "over-or-under" applied overhead.) Instructions: Prepare in good form...
The following information relates to the Brown Corporation for the year ended December 31, 2017: 2017...
The following information relates to the Brown Corporation for the year ended December 31, 2017: 2017 net income $75,000 Unrealized holding gain on available-for-sale debt securities during the year $6,000 Unrealized holding loss on equity securities classified as trading securities ($4,000) The accumulated other comprehensive income (AOCI) account had a credit balance of $45,000 at the end of 2016. Assuming no other changes during the year affected AOCI and assuming that the unrealized loss on trading securities is already reflected...
The following schedule of information relates to Lumos, Inc. for the year ended December 31, 2017:...
The following schedule of information relates to Lumos, Inc. for the year ended December 31, 2017: Nonoperating cash receipts: For sale of common stock $ 65,280 From sale of land (original cost $111,600) 94,800 From sale of intangible assets (at net book value) 37,800 Nonoperating cash payments: For purchase of common stock as investment 1,020,000 To stockholders as dividends 117,600 The company’s balance sheet reports the following: December 31, 2017 December 31, 2016 Cash $ 134,160 $ 100,800 Accounts receivable...
10. The following information relates to Nabisco Corporation for the year ended December 31, 2016. All...
10. The following information relates to Nabisco Corporation for the year ended December 31, 2016. All amounts are before income taxes. Assume a 25% income tax rate for all items.      Net sales                                                $ 1,050,000      Other expenses and losses                                 $ 100,000      Operating expenses                                         $ 200,000      Other revenues and gains                                   $ 60,000      Cost of goods sold                                         $ 450,000      Unrealized loss on available-for-sale securities           $ 50,000 Additional information: The entire snack division was discontinued on September 30....
The financial statements of Pouchie Co. included the following information for the year ended December 31,...
The financial statements of Pouchie Co. included the following information for the year ended December 31, 2016 (amountsin millions Depreciation and amortization expense $260 Cash dividends declared and paid 343 Purchase of equipment 818 Net income 396 Beginning cash balance 128 Proceeds of common stock issued 171 Proceeds from sale of building (at book value) 215 Accounts receivable increase 16 Ending cash balance 92 Inventory decrease 45 Accounts payable increase 54 Required: Complete the following statement of cash flows, using...
The inventory records of Kuffel Co. reflected the following information for the year ended December 31,...
The inventory records of Kuffel Co. reflected the following information for the year ended December 31, 2019: Date Transaction Number of Units Unit Cost Total Cost 1/1 Beginning inventory 150 $ 31 $ 4,650 1/24 Purchase 70 34 2,380 2/22 Sale (100 ) - - 3/7 Purchase 90 38 3,420 4/10 Purchase 140 37 5,180 6/11 Sale (100 ) - - 9/28 Purchase 50 36 1,800 12/4 Sale (100 ) - - b. Assume that Kuffel Co. uses a perpetual...
The records of Koop Co. provided the following information for the year ended 31 December 20X8:
The records of Koop Co. provided the following information for the year ended 31 December 20X8:  Additional information:a. Sold equipment for cash (cost, $30,000; accumulated depreciation, $18,000).b. Purchased land, $40,000 cash.c. Acquired land for $42,000 and issued common shares as payment in full.d. Acquired equipment, cost $32,000; issued a $32,000, three-year, interest-bearing note payable. Required:Prepare the SCF, using the two-step indirect method. Analyze every account to ensure all changes are included. Assume unexplained changes are from logical sources. Include required...
The following information relates to Hudson City for its fiscal year ended December 31, 2017. During...
The following information relates to Hudson City for its fiscal year ended December 31, 2017. During the year, retailers in the city collected $1,700,000 in sales taxes owed to the city. As of December 31, retailers have remitted $1,100,000, $200,000 is expected in January 2018, and the remaining $400,000 is expected in April 2018. On December 31, 2016, the Foundation for the Arts pledged to donate $1, up to a maximum of $1 million, for each $3 that the museum...
The following information relates to Hudson City for its fiscal year ended December 31, 2017. During...
The following information relates to Hudson City for its fiscal year ended December 31, 2017. During the year, retailers in the city collected $1,700,000 in sales taxes owed to the city. As of December 31, retailers have remitted $1,100,000, $200,000 is expected in January 2018, and the remaining $400,000 is expected in April 2018. On December 31, 2016, the Foundation for the Arts pledged to donate $1, up to a maximum of $1 million, for each $3 that the museum...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT