The loss incurred by food servicesdivision wouldbe

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Unformatted text preview: iation expense 80,000 Miscellaneous expense 75,000 Total expenses 315,000 Net income $265,000 P13–3 c. Concluded Comprehensive Income = = = = Change in Equity from Nonowner Sources Revenues – Expenses + Gains – Losses + Cumulative Accounting Adjustments $580,000 – $315,000 + 0 – 0 $265,000 _ * Fees and expenses represent Raleigh’s only nonowner changes in equity. The two measures are equal because Raleigh’s economic events/activities do not differ from those described in the income statement. P13–4 a. Sales Sales returns Cost of goods sold Dividends Rent expense Wages payable Loss on sale of food services division Income Statement Yes Yes Yes No Yes No Yes Loss incurred by food services division Yes Depreciation expense Cumulative effect on income of change in depreciation methods Yes Gain on land appropriated by government Insurance expense Inventory Administrative expenses Prepaid insurance Gain on sale of short­term investments Classification . Usual and frequent Usual and frequent Usual and frequent N/A Usual and frequent N/A Disposal of business segment Disposal of business segment Usual and frequent Yes Change in accounting method Yes Yes No Yes No Yes Unusual and infrequent Usual and frequent N/A Usual and frequent N/A Unusual or infrequent P13–4 Concluded Note: The loss on sale of food services division and the loss incurred by food services division would be classified as a disposal of a business segment only if the food services division meets the requirements of being a business segment as defined under GAAP. If the food services division does not meet these requirements, then the loss on sale of food services division would be classified as part of other revenues and expenses. The loss incurred by food services division would be broken down into its components (i.e., revenues and expenses) and reported as part of operating revenues and expenses. b. Crozier Industries Income Statement For the Year Ended December 31, 2012 Revenue: Sales revenue Less:Sales returns Gain on sale of short­term investments Total revenue $ 977,000 (9,000) 142,000 $ 1,110,000 Expenses: Cost of goods sold $ 496,000 Rent expense 90,000 Depreciation expense 100,000 Insurance expense 12,000 Administrative expenses 109,000 Total expenses 807,000 Income from continuing operations (before taxes) $ 303,000 Income taxes 106,050 Income from continuing operations $ 196,950 Discontinued operations: Loss on operation of discontinued segment $3,500) (6,500) (net of tax benefit of $ Loss on disposal of discontinued segment (net of tax benefit of $700) (1,300) Discontinued operations (7,800) Income before extraordinary items $ 189,150 Extraordinary gain on appropriated land (net of taxes of $32,200) 59,800 Income before effect of accounting changes $ 248,950 Cumulative effect of change in accounting principle (net of tax benefit of $45,500) (84,500) Net income $ 164,450 Sales revenues and all the expenses (cost of goods sold, rent, depreciation, insurance, and adminis...
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This homework help was uploaded on 03/03/2014 for the course ACCT 5053 taught by Professor Staff during the Fall '08 term at Oklahoma State.

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