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421week3TeamA all parts - Week 2 Team A Assignment Maria...

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Week 2 Team A Assignment Maria Garcia, John Willms, Rebecca Mittag, Scott Ward 31-Oct-11 ACCT/421 Intermediate Financial Accounting 1 Lee Kroll
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Tony Rich Inc. Income Statement For Year-End December 31, 2007 $798,500 Income tax (30%) 220,350 Other revenues and gains Income from continuing operations $578,500 Discontinued operations loss 115000 Less: applicable income tax (30%) 34500 80500 Income before extraordinary items $497,650 Extraordinary item Extraordinary loss 80,000 Less: applicable tax (46%) 36,800 -43,200 Net Income $454,450 Per share of common stock 80,000 shares of stock Income from continuing operation $7..23 $578500/80,000 = 7.23 Loss from discontinued operation -1.01 $80500 /80,000 = 1.01 Income before extraordinary item $6.22 Extraordinary loss -0.54 43,200/80,000 = $0.54 Net income $5.68 Income from continuing operation before taxes Unusual gain insurance policy & corrections in erros (nontaxable)
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a) Realized gross profit recognized in 2008 under the installment-sales method of accounting is $87,375. Sale Year Gross Profit Percentage 08 collections 08 realized profits 2007 20% 240,000 48,000 2008 21.875% 180,000 39,375 Total 87,375 b) c)
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