ACT3391FALL2010TraditionalHomework8to11solutiona

ACT3391FALL2010TraditionalHomework8to11solutiona - HOMEWORK...

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HOMEWORK FALL 2010 ACT3391 8. (6 points) Howard Company Cash $ 2,500,000 Inventory $ 4,000,000 Investments in bonds $ 1,000,000 Accounts receivable $ 4,000,000 Allowance for doubtful accounts $ 40,000 Notes payable $ 3,000,000 Prepare a multiple-step income statement for 2010 for Howard Company. Do NOT worry about EPS calculations. Howard Company Income Statement For the year ended December 31, 2010 Sales revenue $45,000,000 Cost of goods sold 20,000,000 Gross profit 25,000,000 Selling and administrative expenses 4,800,000 Bad debt expenses 360,000 Income from operations 19,840,000 Interest expense 120,000 Interest income 20,000 Income from continuing operations before income taxes 19,740,000 Income taxes 6,909,000 Income from continuing operations 12,831,000 Gain on disposal of component, net of taxes of $1,400,000 2,600,000 Income before extraordinary item 15,431,000 Extraordinary flood loss, net of taxes of $315,000 585,000 Net income $14,846,000 9. (1.5 points) Wine Company
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