LN - IS (ch 4) comprehensive example

LN - IS (ch 4) comprehensive example - Ch 4: Income...

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Ch 4: Income Statement ACCT 401, SP 11 1. Comprehensive example: EXAMPLE 14 Merry Corporation had income from continuing operations of $800,000 (after taxes) in 2010. In addition, the following information, which has not been considered, is as follows. 1. In 2010, Merry experienced an uninsured earthquake loss in the amount of $200,000. 2. A machine was sold for $140,000 cash during the year at a time when its book value was $110,000. (Depreciation has been properly recorded.) The company often sells machinery of this type. 3. Merry decided to discontinue its stereo division in 2010. During the current year, the loss on the disposal of this component of the business was $150,000 less applicable taxes. 4. It was discovered that revenue for 2010 was overstated by $50,000 due to a mathematical error. 5. The company had unrealized losses on securities available for sale of $100,000. Required: Present in good form the income statement of Merry Corporation for 2010 starting with "income from continuing operations." Assume that Merry’s tax rate is 30% and 200,000 shares of
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This note was uploaded on 02/22/2012 for the course ACCT 401 taught by Professor Winchel during the Spring '10 term at South Carolina.

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LN - IS (ch 4) comprehensive example - Ch 4: Income...

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