Introduction to Financial Accounting: Exercise 8Insiya Yusufali - Unit 8 ExercisesQ.1)The statement of earnings for Stark Ltd. during the year ended December 31, 2016 appears below:Sales$162,000Cost of goods sold96,000Gross profit66,000Expenses (Note 1)36,000Net income$30,000Note 1: Includes $6,000 of interest expense, and $3,200 of income tax expense.Additional information:1.Average number of common shares outstanding in 2016 was 15,000.2.The market price of Stark’s shares was $36 per share at the end of 2016.3.Cash dividends of $6,000 were paid, $1,200 of which were paid to preferred shareholders.Calculate the earnings per share for 2016.
Q2.)Black Panther Comics Ltd., located in Wakanda had income before income tax of $110,000 and taxable income of $90,000 for 2016, the company’s first year of operations. The income tax rate in Wakanda is 25%. The company uses ASPE.Make the entry to record Black Panther Comics Ltd. income taxes for 2016.