20.On January 1 and December 31, retained earnings were $40,000 and $53,000, respectively. During the year, $21,000 of dividends were declared. Calculate net income during the year.
21.The following information was taken from the accounting records of ABCO Corporation for the year ending December 31, 2009.
Cost of sales
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$342,000
|
Loss on sale of business segment
|
23,000
|
Profit from operations of discontinued business segment
|
19,000
|
Operating expenses
|
176,000
|
Revenue from sales
|
690,000
|
Number of shares of common stock outstanding
|
100,000
|
Income tax rate
|
30%
|
Appropriated retained earnings for plant expansion
|
176,000
|
Dividends
|
130,000
|
Gain on sale of plant asset
|
23,000
|
A.In good form, prepare the section of the income statement that begins immediately under ‘income from continuing operations’. Do not be concerned with calculating the amount reported as ‘income from continuing operations.’
B.List all the items that would appear in the ‘Other Revenue/Other Expenses’ section of the income statement.
C.How is the number of shares of common stock outstanding used on the income statement?
22.The following are the revenue and expense accounts of the current year for ABCO Corporation:
Sales revenue
|
$200,000
|
Interest revenue
|
3,000
|
Interest expense
|
6,000
|
Gain from sale of land
|
2,700
|
Cost of goods sold
|
120,000
|
Administrative expense
|
39,000
|
Gain due to hurricane loss – infrequent and unusual
|
45,000
|
All items are before income taxes. The income tax rate is 20%. Calculate any extraordinary gain or loss that should be disclosed on the income statement.
23.Balance sheet information of Digital Solutions, Inc.at December 31, 2008, is provided below.
Assets
|
$100,000
|
Liabilities
|
34,000
|
Shareholders' equity
|
66,000
|
During 2009, the company entered into the following transactions:
1. Common stock was issued for $12,000 cash.
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2. Services were performed for $45,000 cash.
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3. Cash expenses of $31,000 were incurred.
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4. Long-term liabilities of $18,000 were paid.
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5.The market value of an available-for-sale investment owned at yearend exceeded its cost by $6,000.
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6. Dividends of $9,000 were declared and paid.
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A. Which transactions are operating?
B. Compute net income for the year ending December 31, 2009.
C. Compute comprehensive income for the year ending December 31, 2009.