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Problem II Multiple-step income statement--Perpetual Inventory --Presented below is information related to Katie Company for the...

Problem II Multiple-step income statement--Perpetual Inventory --Presented below is information related to Katie Company for the year 2015. Note that all the accounts may not be needed.   All numbers are pretax. (20 Points)

Administrative Expenses …………………………………………     400,000         C/S Shares Issued          120,000

Unrealized loss on Available for Sale Securities………                          60,000     Treasury Shs                20,000

Interest Revenue …………………………………………………     150,000           Shares Outstanding       100,000

Realized Loss on Sale of Delivery Equipment ………………      150,000

Discontinued Operations………………..…………………..…            400,000

Sales     …………………………………………………………… 4,650,000

Selling Expenses ……………………….…………………………     300,000

Allowance for Doubtful Accounts ………………………………..       50,000

Cash Dividends Declared and Paid on Common Stock ………….    200,000

Cash Dividends Declared and Not Paid on Preferred Stock …….      100,000

Loss resulting from Computation Error in Previous ………….…     200,000

Unearned Revenue………………………………………………..            75,000

Cost of Goods Sold ……………………………………………… 2,6 00,000

Sales Returns and Allowance …………………………………….      50,000

Beginning Balance—Retained Earnings ……………………….    2,000,000

Beginning Balance— Accumulative Other Comprehensive Inc…      150,000  

Other Information:   Assume a 30% tax rate. Answer the following questions. If possible, please show all work.

1. Net Sale -----------------------------------------------------------------     $__________________

2. Income From Operations--------------------------------------------   $__________________

3. Total Gains and Losses    -------------------------------------------- $__________________

Taxes ---------------------------------------------------------------------    $__________________

income from continuing operations before ?                               $__________________    EPS__________

?__________________________________________________           $__________________      EPS__________

Net Income ---------------------------------------------------------------    $__________________      EPS__________

For questions 7 to 9, assume Net Income is $800,000

8.Total Comprehensive Income --------------------------------------- $__________________

9.Ending Balance for Accumulative Comprehensive Income ------     $__________________

10.Beginning Retained Earnings …………………………………………      $3,000,000

+ or –

= Ending Retained Earnings ……………………………………….   $__________________

Solutions

Expert Solution

1. Net sale : 4,700,000

2. Incomw from operations : 1,350,000

3. Total gains : 1,750,000

4. Taxes : 525,000

5. Income from continuing operation before TAX : 135000 EPS: 10.21

7. net income before tax : 1,750,000

8. Total comprehensive income : 500000

9. Ending balance of total comprehensive income : 2,000,000 + 150,000 + 500,000 = 2,650,000

10. Ending retained earnings : 2500,000

10.

ekkarill92 answered 1 year ago
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