12.Hubbell Service showed the following information for 2010: Net sales revenue, $410,000; interest revenue, $11,000; cost of goods sold, $220,000; operating expense, $15,000, extraordinary gain on retirement of debt, $30,000; and dividends declared, $14,000. Calculate operating income for 2010.
13.The following are some accounts for MarvellCorp. for 2009:
Sales revenue
|
$102,000
|
Cost of goods sold
|
85,000
|
Administrative expense
|
34,000
|
Interest expense
|
3,000
|
Loss from disposal of segment
|
21,000
|
Gain from sale of land
|
4,000
|
Stock dividends declared
|
9,000
|
Loss due to permanent value decline of plant asset
|
6,000
|
Extraordinary loss from hurricane
|
19,000
|
Unrealized gain from trading securities
|
5,000
|
Interest revenue
|
1,000
|
All amounts are before income taxes. Marvell has a 30% tax rate. Determine the amount of Marvell’ ‘other revenue’ and ‘other expenses’ for 2009. List all non-income statement items and indicate on which financial statement they are reported.
14.Hilton Corporation’s income statement for the year ending December 31, 2009, appears below.
Net sales
|
$810,000
|
|
Cost of goods sold
|
(610,000)
|
|
Gross profit
|
200,000
|
|
Selling and administrative expenses
|
(90,000)
|
|
Net operating income
|
110,000
|
|
Gain on sale of securities
|
56,000
|
|
Interest expense
|
(3,000)
|
|
Income from continuing operations before tax
|
163,000
|
|
Income tax expense
|
(48,900)
|
|
Income from continuing operations
|
114,100
|
|
Extraordinary gain (net of tax)
|
22,000
|
|
Income before cumulative effect
|
136,100
|
|
Income effect due to change in accounting principle
|
32,000
|
|
Net income
|
$168,100
|
|
Compute the maximum amount of dividends Hilton can pay if it has a debt covenant expressed as 20percent of net income, and as 20 percent of net operating income. Which amount would a creditor more likely use as the restriction on dividends? Explain.
15.Jarvis Company provided the following information for the year ending December 31, 2009:
Cost of goods sold
|
$400,000
|
Gain on sale of business segment
|
20,000
|
Income tax rate
|
30%
|
Interest income
|
5,000
|
Interest expense
|
7,000
|
Loss from operation of discontinued business segment
|
12,000
|
Operating expenses
|
23,000
|
Revenue from sales
|
730,000
|
Number of shares of common stock outstanding
|
100,000
|
Prepare an income statement in good form. You may omit the heading. Include all earnings per share amounts required for the year ending December 31, 2009.