Ac550 Week 2 Essay

603 WordsMay 21, 20123 Pages
E4-8 (a) BROKAW CORP. | BROKAW CORP. | | Income Statement | | For the Year Ended December 31, 2010 | | Sales Revenue | | | | Net sales | | $1,200,000 | | Cost of goods sold | | 780,000 | | Gross profit | | 420,000 | | | | | | Operating Expenses | | | | Selling expenses | $65,000 | | | Administrative expenses | 48,000 | 113,000 | | Income from operations | | 307,000 | | | | | | Other Revenues and Gains | | | | Dividend revenue | 20,000 | | | Interest revenue | 7,000 | 27,000 | | | | 334,000 | | Other Expenses and Losses | | | | Write-off of inventory due to | | | | obsolescence | | 80,000 | | Income before income tax and extraordinary | | | | item | | 254,000 | | Income tax | | 86,360 | | Income before extraordinary item | | 167,640 | | Extraordinary item | | | | Casualty loss | 50,000 | | | Less: Applicable tax reduction | 17,000 | 33,000 | | Net income | | $134,640 | | Per share of common stock: | | | | Income before extraordinary item | | | | ($167,640 ÷ 60,000) | | $2.79* | | Extraordinary item, net of tax | | -0.55 | | | Net income ($134,640 ÷ 60,000) | | $2.24 | (b) | BROKAW CORP. | | Retained Earnings Statement | | For the Year Ended December 31, 2010 | | Retained earnings, Jan. 1, as reported | $980,000 | | Correction for overstatement of net income in prior | | | period (depreciation error) (net of $13,600 tax) | -26,400 | | Retained earnings, Jan. 1, as adjusted | 953,600 | | Add: Net income | 134,640 | | | 1,088,240 | | Less: Dividends declared | 45,000 | | Retained earnings, Dec. 31 | $1,043,240 | P4-1 DICKINSON COMPANY | | Income Statement | | For the Year Ended December 31, 2010 | | Sales | |

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