SOLUTIONS TO BRIEF EXERCISES-4-1

SOLUTIONS TO BRIEF EXERCISES-4-1 - SOLUTIONS TO BRIEF...

Info icon This preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
SOLUTIONS TO BRIEF EXERCISES BRIEF EXERCISE 4-1 STARR CO. Income Statement For the Year 2010 Revenues Sales ....................................................................... $540,000 Expenses Cost of goods sold ................................................ $330,000 Wage expense ........................................................ 120,000 Other operating expenses .................................... 10,000 Income tax expense .............................................. 25,000 Total expenses ............................................. 485,000 Net income ........................................................................ $55,000 Earnings per share ........................................................... $0.55 * *$55,000 ÷ 100,000 shares. Note : The increase in value of the company reputation and the unrealized gain on the value of patents are not reported.
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
BRIEF EXERCISE 4-2 BRISKY CORPORATION Income Statement For the Year Ended December 31, 2010 Revenues Net sales ............................................................... $2,400,000 Interest revenue .................................................. 31,000 Total revenues ............................................. 2,431,000 Expenses Cost of goods sold .............................................. $1,450,000 Selling expenses ................................................. 280,000 Administrative expenses .................................... 212,000 Interest expense .................................................. 45,000 Income tax expense* ........................................... 133,200 Total expenses ........................................... 2,120,200 Net income ..................................................................... $ 310,800 Earnings per share** ..................................................... $4.44 *($2,431,000 – $1,450,000 – $280,000 – $212,000 – $45,000) X 30% = $133,200. **$310,800 ÷ 70,000 shares.
Image of page 2
BRIEF EXERCISE 4-3 BRISKY CORPORATION Income Statement For the Year Ended December 31, 2010 Net sales ................................................................ $2,400,000 Cost of goods sold ............................................... 1,450,000 Gross profit ................................................ 950,000 Selling expenses .................................................. $280,000 Administrative expenses ..................................... 212,000 492,000 Income from operations ....................................... 458,000 Other revenue and gains Interest revenue ......................................... 31,000
Image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern