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ACT_3391_Chp_4_Homework_Solutions

ACT_3391_Chp_4_Homework_Solutions - Intermediate Accounting...

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Intermediate Accounting I Amanda N. Paul, CPA, MBA Troy University
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Chapter 4 EXERCISE 4-2 (a) Total net revenue: Sales $390,000 Less: Sales discounts $ 7,800 Sales returns 12,400 20,200 Net sales 369,800 Dividend revenue 71,000 Rental revenue 6,500 Total net revenue $447,300 (a) Net income: Total net revenue (from a) $447,300 Expenses: Cost of goods sold 184,400 Selling expenses 99,400 Administrative expenses 82,500 Interest expense 12,700 Total expenses 379,000 Income before income tax 68,300 Income tax 31,000 Net income $ 37,300
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EXERCISE 4-2 (Continued) (a) Dividends declared: Ending retained earnings $134,000 Beginning retained earnings 114,400 Net increase 19,600 Less: Net income (37,300 ) Dividends declared $ 17,700 ALTERNATE SOLUTION Beginning retained earnings $114,400 Add: Net income 37,300 151,700 Less: Dividends declared ? Ending retained earnings $134,000 Dividends declared must be $17,700 ($151,700 – $134,000)
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EXERCISE 4-5 Maria Conchita Alonzo Corp. Income Statement For the Year Ended December 31, 2007 Sales Revenue Sales $1,380,000 Less: Sales returns and allowances $150,000 Sales discounts 45,000 195,000 Net sales revenue 1,185,000 Cost of goods sold 621,000 Gross profit on sales 564,000 Operating Expenses Selling expenses 194,000 Admin. and general expenses 97,000 291,000 Income from operations 273,000
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