the account balances of Sunland Furniture Co

Question-1

Presented below are changes in all the account balances of Sunland Furniture Co. during the current year, except for retained earnings.

Increase (Decrease)Increase (Decrease)
Cash$70,220Accounts Payable$(53,000)
Accounts Receivable (net)50,700Bonds Payable83,800
Inventory135,200Common Stock125,600
Investments(48,240)Paid-In Capital in Excess of Par—Common Stock14,220

Question-2

Presented below is information related to Marigold Company at December 31, 2020, the end of its first year of operations.

Sales revenue$308,620
Cost of goods sold146,950
Selling and administrative expenses49,300
Gain on sale of plant assets29,000
Unrealized gain on available-for-sale debt investments9,620
Interest expense5,960
Loss on discontinued operations11,960
Dividends declared and paid4,550

Compute the following:

(a) Income from operations

(b) Net income

(c) Comprehensive income

(d) Retained earnings balance at December 31, 2020

Question-3

Two accountants for the firm of Elwes and Wright are arguing about the merits of presenting an income statement in a multiple-step versus a single-step format. The discussion involves the following 2020 information related to Waterway Company ($000 omitted).

Administrative expense
    Officers’ salaries$4,972
    Depreciation of office furniture and equipment4,032
Cost of goods sold60,642
Rent revenue17,302
Selling expense
    Delivery expense2,762
    Sales commissions8,052
    Depreciation of sales equipment6,552
Sales revenue96,572
Income tax9,142
Interest expense1,932

Common shares outstanding for 2020 total 31,576 (000 omitted).

  • Prepare an income statement for the year 2020 using the multiple-step form. (Round earnings per share to 2 decimal places, e.g. 1.48.)
  • Prepare an income statement for the year 2020 using the single-step form. (Round earnings per share to 2 decimal places, e.g. 1.48.)

Question-4

The stockholders’ equity section of Coronado Corporation appears below as of December 31, 2020.

8% preferred stock, $50 par value, authorized
   101,800 shares, outstanding 91,800 shares$4,590,000
Common stock, $1.00 par, authorized and issued 10,200,000 shares10,200,000
   Additional paid-in capital20,910,000
   Retained earnings$136,680,000
   Net income33,660,000170,340,000
$206,040,000

Net income for 2020 reflects a total effective tax rate of 20%. Included in the net income figure is a loss of $18,360,000 (before tax) as a result of a non-recurring major casualty. Preferred stock dividends of $367,200 were declared and paid in 2020. Dividends of $1,020,000 were declared and paid to common stockholders in 2020.

Compute earnings per share data as it should appear on the income statement of Coronado Corporation. (Round answers to 2 decimal places, e.g. 1.48.)
Question-5

  • Coronado Corporation reported the following for 2020: net sales $1,220,300, cost of goods sold $729,000, selling and administrative expenses $331,600, and an unrealized holding gain on available-for-sale debt securities $16,300.
  • Prepare a statement of comprehensive income using the one statement format. (Ignore income taxes and earnings per share.)

Leave a Reply

Your email address will not be published.