FIN 3162 Homework BS &IS Solution

FIN 3162 Homework BS &IS Solution - Problem#1...

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Problem #1 Morton Company Income Statement For the Year Ended December 31, 2007 Net sales $800,000 Costs and expenses: Cost of goods sold $640,000 Selling, general, and administrative expenses 63,000 Interest expense 10,000 Infrequent charge—loss on sale of investments 7,000 Total costs and expenses 720,000 Income before taxes and extraordinary item 80,000 Income taxes 24,000 Income before extraordinary item 56,000 Extraordinary loss Earthquake damage 10,000 Less applicable taxes 3,000 (7,000 ) Net income $ 49,000 Per share of common stock— Income before extraordinary item $2.80 Extraordinary loss, net of tax (.35 ) Net income $2.45 Problem #2 Malone Corporation INCOME STATEMENT For the Year Ended December 31, 2007 Sales $1,100,000 Cost of goods sold: Merchandise inventory, Jan. 1 $152,000 Purchases $642,000 Less purchase discounts 18,000 Net purchases 624,000 Merchandise available for sale 776,000 Less merchandise inv., Dec. 31 125,000 Cost of goods sold 651,000 Gross profit on sales 449,000 Operating expenses: Selling expenses 128,000
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General and administrative expenses 150,000 Total operating expenses 278,000 Operating income 171,000 Other revenue and expense:
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