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Sandy Beltran P4-3 Income from continuing operations before taxes: Previously stated income $790,000 #3 Loss on sale of securities-57,000 #4 Gain on proceeds on life insurance ($150,000 - $46,000) 104,000 #2 Error in calculation of depreciation: Previously stated depreciation 9,000 Corrected depreciation-7,500 1,500 a. 2010 - Restated income $838,500 b. Income from continuing operations before taxes $838,500 Gain on life insurance ($104,000) Taxable income $734,500 Tax rate 30% Income tax expense $220,350 Maher Inc. Income Statement-Partial 2010 a. Income from continuing operations before income tax $838,500 b. Income tax-220,350 Income from continuing operations: 618,150 #5 Discontinued operations: Loss from disposal of recreational division 115,000 Less: applicable income tax 34,500 80,500 #1 Income before extraordinary item 537,650 Extraordinary item-Loss from casualty 90,000 Less: applicable income tax 41,400 48,600 Net income $489,050 Per share of common stock Income from continuing operations $5.15 ($618,150 / 120,000 shares) Discontinued operations, net of tax-0.67 ($80,500 / 120,000 shares) Income before extraordinary items 4.48 Extraordinary item, net of tax-0.41 ($48,600 / 120,000 shares) Net income ($489,050 / 120,000 shares) $4.07 All above numbers per share are rounded. #6 The change in accounting method from average cost to FIFO in 2010 has been applied to the reporting of the 2010 income. The adjustment of the change in accounting method in previous years will be recorded on the retained earnings statement. P18-6 Veronica Dorbad PART A: 2010 Costs to date 2,880,000 Est. costs to complete 3,520,000 Est total costs 6,400,000 2,880,000/6,400,000= 45% 8,400,000*45%= 3,780,000 Revenue 3,780,000 Cost incurred 2,880,000 Profit 900 2011 Costs to date 5,110,000 Est. costs to complete 2,190,000 Est total costs 7,300,000 Revenue 2,100,000 Cost incurred 2,230,000 loss 130 2012 Revenue 2,520,000 Cost incurred 2,190,000 profit 330,000 PART B: 2012 Total Revenue recognized 8,400,000 Total costs incurred 7,300,000 Profit recognized in 2012 1,100,000 P18-7 Mareia Pruett B) Completed-Contract method Step 1 - Determine the Percentage of completion as of the end of 2010... View Full Document

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