prob039 - Problem 39 (Past exam question: 65 minutes)...

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Problem 39 (Past exam question: 65 minutes) (Text: Ch. 4, 5, 7) The following condensed income statement for accounting purposes is for Payless Co. Ltd., a Canadian-controlled private corporation for the fiscal year ended December 31, 2008. Payless Co. Ltd. was incorporated in 1968 and has continued in the same retail business since that time. Payless Co. Ltd. Income Statement For the year ended December 31, 2008 Sales $600,000 Cost of sales - see note (1) $365,000 Administrative and selling expenses - see note (2) 110,000 475,000 125,000 Other income and extraordinary expense - see note (3) 225,000 Net income before income taxes 350,000 Provision for income taxes 75,000 Net income after income taxes $275,000 Additional and Supplementary Information Note (1) Cost of Sales Inventory Dec. 31, 2007 — net of a reserve for potential decline in market prices of $10,000 $100,000 Net purchases 400,000 500,000 Inventory Dec. 31, 2008 $150,000 Less: a reserve for a potential decline in market prices
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prob039 - Problem 39 (Past exam question: 65 minutes)...

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