Ch4 Solutions

Ch4 Solutions - SOLUTIONS TO BRIEF EXERCISES BRIEF EXERCISE...

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SOLUTIONS TO BRIEF EXERCISES BRIEF EXERCISE 4-1 STARR CO. Income Statement For the Year 2010 Revenues Sales. ...................................................................... $540,000 Expenses Cost of goods sold. ............................................... $330,000 Wage expense. ....................................................... 120,000 Other operating expenses. ................................... 10,000 Income tax expense. ............................................. 25,000 Total expenses. ............................................ 485,000 Net income. ....................................................................... $55,000 Earnings per share. .......................................................... $0.55 * *$55,000 ÷ 100,000 shares. Note : The increase in value of the company reputation and the unrealized gain on the value of patents are not reported.
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BRIEF EXERCISE 4-2 BRISKY CORPORATION Income Statement For the Year Ended December 31, 2010 Revenues Net sales. .............................................................. $2,400,000 Interest revenue. ................................................. 31,000 Total revenues. ............................................ 2,431,000 Expenses Cost of goods sold. ............................................. $1,450,000 Selling expenses. ................................................ 280,000 Administrative expenses. ................................... 212,000 Interest expense. ................................................. 45,000 Income tax expense*. .......................................... 133,200 Total expenses. .......................................... 2,120,200 Net income. .................................................................... $ 310,800 Earnings per share**. .................................................... $4.44 *($2,431,000 – $1,450,000 – $280,000 – $212,000 – $45,000) X 30% = $133,200. **$310,800 ÷ 70,000 shares.
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BRIEF EXERCISE 4-3 BRISKY CORPORATION Income Statement For the Year Ended December 31, 2010 Net sales. ............................................................... $2,400,000 Cost of goods sold. .............................................. 1,450,000 Gross profit. ............................................... 950,000 Selling expenses. ................................................. $280,000 Administrative expenses. .................................... 212,000 492,000 Income from operations. ...................................... 458,000 Other revenue and gains Interest revenue. ........................................ 31,000 Other expenses and losses Interest expense. ....................................... 45,000 14,000 Income before income tax. .................................. 444,000 Income tax expense. ............................................ 133,200 Net income. ........................................................... $ 310,800 Earnings per share. .............................................. $4.44 * *$310,800 ÷ 70,000 shares.
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Ch4 Solutions - SOLUTIONS TO BRIEF EXERCISES BRIEF EXERCISE...

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