Duchac Chapter 12 Series A Problems

Duchac Chapter 12 Series A Problems - CHAPTER 12 SERIES A...

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Unformatted text preview: CHAPTER 12 SERIES A PROBLEMS Prob. 12–1A MOTOSPORT, INC. Income Statement For the Year Ended October 31, 2006 Sales................................................................................... $1,350,000 Cost of merchandise sold................................................. 612,400 Gross profit........................................................................ $ 737,600 Operating expenses: Selling expenses: Sales salaries expense......................................... $140,000 Advertising expense.............................................. 64,000 Depreciation expense—store equipment............ 23,000 Store supplies expense......................................... 6,500 Miscellaneous selling expense............................ 5,500 Total selling expenses..................................... $239,000 Administrative expenses: Office salaries expense......................................... $ 75,000 Rent expense......................................................... 24,000 Depreciation expense—office equipment............ 7,000 Miscellaneous administrative expense................ 12,000 Total administrative expenses........................ 118,000 Total operating expenses.......................... 357,000 Income from continuing operations before other items $ 380,600 Other income, expenses, and special charges: Interest revenue........................................................... 12,000 Loss from fixed asset impairment............................. (110,000) Restructuring charge.................................................. (14,000 ) Income from continuing operations before income tax. $ 268,600 Income tax expense.......................................................... 92,500 Income from continuing operations................................ $ 176,100 Loss from discontinued operations................................. $(31,000) Less applicable income tax.............................................. 12,000 (19,000 ) Income before extraordinary item.................................... $ 157,100 Extraordinary item: Gain on condemnation of land................................... $ 36,400 Less applicable income tax........................................ 13,400 23,000 Net income......................................................................... $ 180,100 Earnings per share: Income from continuing operations........................... $ 7.04 Loss on discontinued operations.............................. (0 .76 ) Income before extraordinary item.............................. $ 6.28 Extraordinary item....................................................... .92 Net income......................................................................... $ 7 .20 Note: Unrealized loss on temporary investments would be an other comprehensive...
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Duchac Chapter 12 Series A Problems - CHAPTER 12 SERIES A...

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