Income Statement

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Income Statement Questions and Answers

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Padua Inc. reports the following information: 2019 2018 Net sales $3,000 $3,200 Net income $120 $140 Gross profit $800 $890 Which of the following is true? a. There has been an increase in net profit ratio in 2019. b. There has been a decrease in net p
Brown Company has the following account balances, extracted from its multiple-step income statement for the current year. Required: Compute the missing amounts. Sales $ Sales Returns and Allowances 4,200 Sales Discounts 3,000 Net Sales 104,200 Cost of
Southeast Airlines had pretax earnings of $85 million, including a gain on disposal of a discontinued operation of $15 million. The company's tax rate is 40%. What is the amount of income tax expense that Southeast should report in its income statement?
Why is the amount for operating income important? A. This figure provides a basis for assessing the success of a company apart from its financing and investing activities and separate from its tax status. B. This is the figure needed for calculating inc
Using the following data, conduct a trend analysis for 2018 using 2015 as the base year (round to 2 decimal places). 2015 Total Assets=573,000 2016 Total Assets=563,000 2017 Total Assets=580,000 2018 Total Assets=598,000
Closing entries (a) reduce the number of permanent accounts. (b) summarize the activity in every account. (c) are prepared before the financial statements. (d) cause the revenue and expense accounts to have zero balances.
What is a common-size income statement? a) A statement that expresses each item on the income statement as a percentage of total assets. b) An income statement that provides intermediate profit measures. c) An income statement that groups all items of rev
Which of the following metrics will not be part of a firm's historical income statements as presented in Form 10-K? a) EBITDA b) SG&A c) Gross Profit d) Operating Profit
Canada Company had the following operating data for the year for its computer division: sales, $650,000; contribution margin, $140,000; total fixed costs (controllable), $100,000; and average total operating assets, $280,000. What is the controllable marg
Which of the following is an example of a nonrecurring item? a) Accounting changes b) Special items c) Discontinued Operation d) All of the above
Which of the following most likely represents a permanent or recurring component of income? a) Gain from selling PP&E b) Rent income c) Change in accounting principles d) Gain from an investment
Which of the following is considered a "nonrecurring item"? a) Impairment of assets b) Restructuring charges c) Extraordinary item d) All of the above
Blossom Company began the year by issuing $76500 of common stock for cash. The company recorded revenues of $770000, expenses of $635000, and paid dividends of $40000. What was Blossom's net income for the year?
What is the layout of an income statement?
Given the following information, prepare the first part of the Multi-Step Income Statement (HINT: through Gross Profit) Selling Expense = 10,000 Inventory = 40,000 Furniture = 40,000 Cash = 30,000 Sales Returns and Allowances = 2,000 Cost of Goods Sold
A company purchases $25,000 of inventory in January 20X6, pays for it in March 20X6 and sells them in May 20X6. The accounting period ends on December 31st. Which of the following statements is correct? A. The statement of cash flows for 20X5 will report
Maria owns 20% of the Race Care Partnership ('RCP'). The partnership has the following items of income and expenses: Sales : 350 Interest Income : 953 Wages : 583 Utilities : 155 How much ordinary business income/loss will Maria report from RCP?
Income statement preparation: On December 31, 2015, Cathy Chen, a self-employed certified public accountant (CPA), completed her first full year in business. During the year, she billed $360,000 for her accounting services. She had two employees, a bookk
Larkin Company accumulated the following standard cost data concerning product I-Tal. Direct materials per unit: 2.10 pounds at $6.36 per pound Direct labor per unit: 5.26 hours at $10 per hour Manufacturing overhead: Allocated based on direct labor hour
Reading Corporation reports 2018 sales of $415 million, income before income taxes of $122.3 million and tax expense of $35.9 million. If sales are projected to increase by 4% next year, projected tax expense for 2019 will be?
Annapolis Corporation's trial balance included debits to expense accounts of $145,000, credits to revenue accounts of $222,000, and debits to the Dividends account of $50,000. Based on this information, what is the amount of the company's net income or lo
The following information is available for Oriole Corporation for the year ended December 31, 2020: cost of goods sold $216,000 sales revenue $444,000 other revenues and gains $48,000 operating expenses $72,000 Assuming a corporate tax rate of 35%, prepar
What is the purpose of an income statement, and who is the audience for this document?
From the following information, calculate the gross profit for Dawson and Partners: Sales: $236,296 Selling expenses: $22,755 Cost of goods sold: $105,287 Discounts allowed: $11,547
During the year 2018, Torino Corporation suffered a $1,160,000 loss when its factory was severely damaged in an earthquake. Assuming the corporate income tax rate is 40%, what amount will Torino report as a non-recurring loss on its income statement for 2
According to the 2018 Southwest Airlines Co. annual report, what are the most significant revenues and expenses?
What kind of information can the 4 basic financial statements provide stockholders for decision making?
During October, a firm had the following transaction involving revenue and expenses. Paid $1100 for rent for October. Provided services for $2550 in cash. Paid $210 for the October telephone service. Provided services for $1700 on credit. Paid salaries of
Use this information to prepare the Single-Step Income Statement for the fiscal year. There are additional lines in the formatted income statement form to allow for authorized alternate presentations. The following is the Easton Company adjusted Trial Ba
Closing entries: a. summarize the activity in every account. b. reduce the number of permanent accounts. c. cause the revenue and expense accounts to have zero balances. d. are prepared before the financial statements.
Suppose Siam Traders has the following revenue and expenses for 2018: Revenues of $7,800,000 Cost of Goods Sold of $1,560,000 Depreciation Expenses of $1,200,000 Income Taxes of $1,560,000 Interest Expenses of $60,000 Other Expenses of $300,000 Sales, Ge
Suppose Lightspeed Industries has the following revenue and expenses for 2018: Revenues of $9,800,000 Cost of Goods Sold of $1,960,000 Depreciation Expenses of $800,000 Income Taxes of $2,196,000 Interest Expenses of $170,000 Other Expenses of $400,000 S
Suppose Ruston Company has the following revenue and expenses for 2018: Revenues of $7,800,000 Cost of Goods Sold of $1,560,000 Depreciation Expenses of $700,000 Income Taxes of $1,676,000 Interest Expenses of $70,000 Other Expenses of $500,000 Sales, Gen
Suppose Dansko Integrated has the following revenue and expenses for 2018: Revenues of $8,500,000 Cost of Goods Sold of $2,550,000 Depreciation Expenses of $800,000 Income Taxes of $1,144,000 Interest Expenses of $90,000 Other Expenses of $500,000 Sales,
Suppose Hopewell Corporation has the following revenue and expenses for 2018: Revenues of $6,400,000 Cost of Goods Sold of $1,280,000 Depreciation Expenses of $1,100,000 Income Taxes of $1,080,000 Interest Expenses of $80,000 Other Expenses of $600,000 Sa
In an effort to concentrate its resources in more profitable areas, Sheeran Corporation recently sold its family cookbook segment but retained its restaurant segment. The disposal constitutes: a. an extraordinary item a discontinued operation, which shoul
Can you explain how multiple-step and single-step income statements differ from each other?
Please give example of an Income Statement for a merchandising business.
The Income Statement for J. White Company shows Cost of Sales of $60,000, Administrative Expenses of $30,000, Rental Expenses of $10,000, Interest Revenue of $20,000, Interest Expense of $15,000, and Net Income after Taxes of $60,000. Assuming there are n
Answer true or false: The Income Summary account is a permanent account that will be carried forward period after period.
Generally accepted accounting principles require the use of accruals and deferrals in the determination of income. How is income determined under the accrual-basis of accounting? Include in your answer what constitutes an accrued item and a deferred (prep
For purposes of discontinued operations, the key elements in determining that a separate segment exists are that the component is: (a) a separate business and generates its own cash flow. (b) in a separate geographic region and can be sold. (c) a separate
Define earnings per share. For which income statement items must EPS be disclosed?
Which of these statements presents an extraordinary item as shown in an income statement? (a) Interest rates that increase quickly (b) Inventory that becomes obsolete (c) A large discount given to a client (d) A flood that damages inventory
A national sports team sells season tickets to customers in September 2011. The official season for the sport will run from November 1, 2011 to April 1, 2012, with games spread out evenly over the 5 months. $10 million of season tickets are sold in Septem
Income Statement Sales $675,300 Costs $297,800 Depreciation Expense $45,100 EBIT Interest Expense $20,700 EBT Taxes @ 35% Net Income = Cash Dividends $62,000 Addition to Retained Earnings = Tax Rate = 35%
Intensive Care Urology Practice (ICUP), a not-for-profit business, had revenues in 2015 of $60,000. Expenses other than depreciation (considered as cash expenses) were 75% of revenues. Depreciation was $8,000. All revenues were collected in cash, and all
A Preparing financial statements Click a Pix Photography works weddings and prom-type parties. The balance of retained earnings was $26,000 at December 31, 2015. At December 31, 2016, the business s accounting records show these balances: Insurance Expen
Company X began operations on January 1, Year 1, with an initial investment of $100,000 from each of its five shareholders. During the year, the company had net income of $200,000 and declared and paid dividends of $50,000. The company's revenues were $50
The Orbus Company has a 30,000 unrealized gain and a 10,000 unrealized loss. Where would Orbus Company report these transactions?
During its first year of operations, Bell Company bills credit customers $64,800 for services rendered. During the year, Bell receives $56,600 from all customers, $9,900 of which is received from cash customers. What amount of revenue should be shown on
Case 1 2 Direct materials used $ 9,600 $ (g) Direct labor 5,000 8,000 Manufacturing overhead 8,000 4,000 Total manufacturing costs (a) 16,000 Beginning work in process inventory 1,000 (h) Ending work in process inventory (b) 3,000 Sales revenue 24,500 (i
Shawns Garden was started on May 1 with an investment of $45,000 cash. Following are the assets, liabilities, and common stock of the company on May 31, 2014, and the revenues and expenses for the month of May, its first month of operations. Accounts Rec
Selling expenses $125,000 Common stock, $10 par, 21,000 shares authorized and issued $210,000 General expenses 134,000 Income from discontinued operations 5,000 Preferred stock, $4, no-par 6,000 shares issued 240,000 Retained earnings, beginning 90,000 Co
Cash flows from operating activities for both the indirect and direct methods are presented for Reverse Logic. All amounts are in thousands (000's). Cash Flows from Operating Activities (Indirect method) Net income $162 Adjustments to reconcile net inco
Martha Innocenti Ito began the Innocenzi Company by investing $75,000 of cash in the business. the company recorded revenues of 5555,000, expenses of 5410.000, and had owner drawings of $30,000. What was Innocenzi's net income for the year? a. $115,000.
Cost of goods sold: a. only appears on merchandising companies' income statements. b. only appears on manufacturing companies' income statements. c. appears on both manufacturing and merchandising companies' income statements. d. is calculated exactly
Briefly explain the importance of assets and liabilities to the decisions of investors and creditors.
Prepare a 2007 balance sheet for Haltiwanger Corp. based on the following information: cash = $210,000; patents and copyrights $720,000; accounts payable = $430,000; accounts receivable = $149,000; tangible net fixed assets = $2,900,000; inventory = $265,
When a company discontinues and disposes of a component segment of its operations, the gain or loss from disposal should be reported as: a. An adjustment to retained earnings. b. A sale of fixed assets in "other" expense. c. An extraordinary item. d. An a
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