Neutrality means that a company cannot select

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Neutrality means that a company cannot select information to favor one set of  interested parties over another.
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means sets  not uced on as must e  being ny
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E3-1 April 2 Cash $30,000 Equipment $14,000 Capital $44,000 2 No entry 3 Supplies $700 A/P $700 7 Rent Expense $600 Cash $600 11 A/R $1,100 Service revenue $1,100 12 Cash $3,200 Unearned service revenue $3,200 17 Cash $2,300 Service revenue $2,300 21 Insurance expense $110 Cash $110 30 Salaries expense $1,160 Cash $1,160 30 Supplies expense $120 Supplies $120 30 Equipment $5,100 Capital $5,100 E3-5 3/31 Depreciation expense $750 Accumulated depreciation $750 Unearned rent revenue $2,100 Rent revenue $2,100 Interest expense $500 Interest payable $500
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Supplies expense $2,150 Supplies $2,150 Insurance expense $900 Prepaid insurance $900 E3-6 1/31 A/R $750 Service revenue $750 Utilities expense $520 Utilities payable $520 Depreciation expense $400 Accumulated dep - dental equp. $400 Interest expense $500 Interest payable $500 Insurance expense $1,250 Prepaid insurance $1,250 Supplies expense $1,200 Supplies $1,200
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E4-6 A) Sales 980,000  Cost of goods sold 516,000  Gross profit 464,000  Operating expenses Selling Expenses Wages and salaries 114,800  Materials and supplies 17,600  Depreciation on plant assets (70%) 45,500  177,900  Administrative expenses Wages and salaries 135,900  Other administrative expenses 51,700  Depreciation on plant assets (30%) 19,500  207,100  Total operating expenses 385,000  Income from operations 79,000  Other revenue (expenses) Rental revenue 29,000  Interest expense (18,000) Total other 11,000  Income before taxes 90,000  Income tax expense 30,600  Net income 59,400  EPS - 59,400/20,000 4.52  B) Revenues Sales 980,000  Rental revenue 29,000  Total Revenue 1,009,000  Expenses Cost of goods sold 516,000  Selling expense 177,900  Administrative expense 207,100  Interest expense 18,000  Income tax expense 30,600  Total expenses 949,600  Net income 59,400  C) The multi step income statement is the best to use because it details out all forms o
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The single-step is much easier and quicker, but does not give the detail investors a E4-8 A) Sales $1,200,000  Cost of goods sold 780,000  Gross profit 420,000  Operating expenses Selling Expenses 65,000  Administrative expenses 48,000  Total operating expenses 113,000  Income from operations 307,000  Other revenue (expenses) Interest revenue 7,000  Dividend revenue 20,000  Write off of obsolete inventory (80,000) Total other (53,000) Income before taxes 254,000  Income tax 86,360  Income from continuing operations 167,640  Extraordinary item - casualty loss, less applicable income tax of $17,000 (33,000) Net income $134,640  Per share of common stock Income from continuing operations $2.79  Extraordinary loss, net of tax (0.55) Net income $2.24  B) Retained earnings, January 1, as reported Correction for understatement of net income in prior period (depreciation expense) Retained earnings, January 1, as adjusted Add: Net income Less: Cash dividends Retained earnigns, December 31 E4-11 Retained earnings, January 1, as reported
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Correction for understatement of net income in prior period (depreciation expense) Retained earnings, January 1, as adjusted Add: Net income Less: Cash dividends Retained earnigns, December 31
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