Fin-Acctg7-SM-Ch11

Fin-Acctg7-SM-Ch11 - Chapter 11 The Income Statement and...

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Chapter 11 The Income Statement and the Statement of Stockholders’ Equity Short Exercises (5-10 min.) S 11-1 Oneida Corporation Income Statement Year Ended March 31, 20X9 Net sales revenue Cost of goods sold Gross profit Operating expenses — detailed Operating income Other gains (losses) — detailed Income (loss) from continuing operations before income tax Income tax expense Income (loss) from continuing operations Discontinued operations, less income tax Income before extraordinary item and cumulative effect of change in accounting principle, less income tax Extraordinary gain or loss, less income tax Cumulative effect of change in accounting principle, less income tax Net income (net loss) Chapter 11 The Income Statement and the Statement of Stockholders’ Equity 699
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(10 min.) S 11-2 Req. 1 Gross profit = $703,646 thousand ($1,825,343 $1,121,697) Income from continuing operations = $62,765 thousand Net income = $60,457 thousand Req. 2 Income from continuing operations = $62,765 thousand Continuing operations will continue from period to period. Their continuity makes income from continuing operations a good predictor of future net income. Financial Accounting 7/e Solutions Manual 700
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(10-15 min.) S 11-3 Financial Resources, Inc. Income Statement Year Ended December 31, 20X7 (Thousands) Net sales revenue…………………………………… $182,000 Cost of goods sold…………………………………. . 71,000 Gross profit…………………………………………. .. 111,000 Operating expenses………………………………… 64,000 Operating income…………………………………… 47,000 Other gains (losses)………………………………… (2,000 ) Income from continuing operations before income tax…………………………………………. 45,000 Income tax expense (40%)………………………… 18,000 Income from continuing operations……………. .. 27,000 Loss on discontinued operations, $15,000, less income tax saving of $6,000……………… (9,000 ) Income before extraordinary item………………. . 18,000 Extraordinary gain, $5,000, less income tax of $2,000………………………. 3,000 Net income……………………………………………. $ 21,000 Chapter 11 The Income Statement and the Statement of Stockholders’ Equity 701
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(10-15 min.) S 11-4 Earnings per share of common stock (10,000 shares of common stock outstanding): Income from continuing operations [($27,000 $6,000) / 10,000]………………………… $2.10 Loss on discontinued operations ($9,000 / 10,000). . (.90 ) Income before extraordinary item [($18,000 $6,000) / 10,000]………………………… 1.20 Extraordinary gain ($3,000 / 10,000)…………………. . .30 Net income [($21,000 $6,000) / 10,000]……………. . $1.50 (5-10 min.) S 11-5 Financial Resources, Inc. Income Statement (partial)
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Fin-Acctg7-SM-Ch11 - Chapter 11 The Income Statement and...

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