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marta [7]
3 years ago
7

The following is a partial trial balance for General Lighting Corporation as of December 31, 2021:

Business
1 answer:
baherus [9]3 years ago
5 0

Answer:

1. single-step income statement for 2021

Sales revenue                                                                             3,100,000

Less Cost of goods sold                                                           (1,340,000)

Gross Profit                                                                                 1,760,000

Less Expenses :

Loss on inventory write-down (obsolescence)    350,000

Selling expense                                                      450,000

General and administrative expense                    225,000  

Interest revenue                                                      (95,000)

Loss on sale of investments                                    30,000

Interest expense                                                       94,000   (1,054,000)

Net Income before tax                                                                 706,000

Income tax expense                                                                    (176,500)

Net Income after tax                                                                    529,500

Earnings per share (EPS)                                                                   $1.77

2. multiple-step income statement for 2021

Sales revenue                                                                             3,100,000

Less Cost of goods sold                                                           (1,340,000)

Gross Profit                                                                                 1,760,000

Less Operating Expenses :

Loss on inventory write-down (obsolescence)    350,000

Selling expense                                                      450,000

General and administrative expense                    225,000   (1,025,000)

Operating Income                                                                        735,000

Less Non-Operating Expenses :

Interest revenue                                                      (95,000)

Loss on sale of investments                                    30,000

Interest expense                                                       94,000       (29,000)

Net Income before tax                                                                 706,000

Income tax expense                                                                    (176,500)

Net Income after tax                                                                    529,500

Earnings per share (EPS)                                                                  $1.77

Explanation:

The difference in these Income statements is that, the Multi-step statement clearly shows income derived from Primary Activities (Operating) whist the Single step statement does not.

<u>Additional Notes :</u>

<em>Earnings per share (EPS) = Earnings Attributable to holders of common stock ÷ Weighted Average Number of Common Stocks</em>

Therefore,

Earnings per share (EPS) = $529,500 ÷ 300,000

                                = $1.77

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"The balance sheet of Ambiance Corporation reported current assets of $186,708, total assets of $300,000, current liabilities of
Alika [10]

Answer:

5.17(Approx)

Explanation:

Given that,

Current assets = $186,708

Total assets = $300,000

Current liabilities = $36,139

Total liabilities = $125,000

current ratio = current assets ÷ current liabilities

                     = $186,708 ÷ $36,139

                     = 5.17(Approx)

Therefore, the company’s current ratio is 5.17.

8 0
3 years ago
Dove, Inc., had additions to retained earnings for the year just ended of $643,000. The firm paid out $40,000 in cash dividends,
Zinaida [17]

Answer:

Earnings for the year = Addition to retained earnings + Dividend paid = $643,000 + $40,000 = $683,000

a. Earnings per share = Earnings / No of shares = $683,000 / 750,000 = 0.91

Dividend per share = Dividend / No of shares = $40,000 / 750,000 = 0.05

Book value per share = Ending equity / No of shares = $7,380,000 / 750,000 = $9.84

b. Market price per share is 30.8. Market to book ratio = $30.80 / $9,84 = $3.13

c. Price earning ratio = $30.80/$0.91 = $33.82

Total sales = $10,680,000, Sales per share = 14.24

Price sales ratio = Market price / Sales = $30.80 / $14.24 = $2.16

3 0
3 years ago
Nathan has been unable to trust banks since the failure of his savings and loan bank. He claims that storing his hard-earned mon
Lerok [7]

Answer:

Nathan's contention is wrong.

Explanation:

Storage of money at home involves the opportunity cost of losing out on income that would've been generated had the same money been invested elsewhere or deposited with a bank.

Secondly, money stored at home is vulnerable to theft and other forms of risks.

Thirdly, stored money at home does not contribute to any economic benefit since such money is out of circular flow of money in the economy. So it yields no return.

Thus, Nathan's contention of stored money at home being costless is wrong.

4 0
3 years ago
Equipment was purchased for $94700 on January 1, 2021. Freight charges amounted to $3800 and there was a cost of $12000 for buil
musickatia [10]

Answer:

$34,200

Explanation:

Step 1 : Cost of Equipment

<em>Cost of Equipment include Purchase Price plus other costs directly incurred to put the asset in location and condition intended for use by management</em>

Cost of Equipment = $110,500

Step 2 : Depreciation

Depreciation = (Cost - Residual Value)/ Useful Life

                       = $17,100

Step 3 : Accumulated Depreciation

Accumulated Depreciation =  $17,100 x 2 = $34,200

Therefore,

the amount of accumulated depreciation at December 31, 2022 is $34,200

3 0
3 years ago
Determine the capitalized cost of a permanent roadside historical marker that has a first cost of $75,000 and a maintenance cost
densk [106]

Answer:

The capitalized cost is $ 84,667.20

Explanation:

First of all please note that the cost of $ 75,000 is already the present cost.

The cost of $3200 which occurs every 3 years can be converted into a value using factor A/F for one life cycle.

The capitalized cost then can be calculated as follows :

CC = $ 75,000 + $ 3200(A/F, 10%, 3 years)/interest

CC = $ 75,000 + $ 3,200(0.3021)/0.1

CC = $ 75,000 + $ 9,667.2

CC = $ 84,667.20

6 0
3 years ago
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