r'fros

In-Da"mpute rncome Measures)

ecember 37, ZA7A, the end of its first i'formation relarecr ro vier
;i"T"#::.lutj,oooJr.tt company at
Sales revenue
Cost of goods solo €310,000
Selling and administrative expenses 140,000
Gain on sale of planr assets 50,000
Unrealized gain on non_trading equity 30,000
securities 10,000
Interest expense
Loss on discontinued operations 6,000
Allocation to non-controlling interest 12,000
Dividends declared and paid 40,000
5,000
Instructionr
. ..
Comp,te fhe foilort'ing: (a) incorne.{rom operations, (b)
company conholli.g stiareholders, (d) incorne, {c) net income attributabre
."d;;;nsir.e 'et urrJ (u) ..toir.,*a;;;;g,
income, to \rier
balance ar Decem_
rA -9914,zara.
UJjg/(Computation of Net Income) Presenteci b.el.on,,are crranges
i,.. all account balances
Furniture Co. cluri'g the current vea, except of Jackso'
for retained earnings.
lncrease
(Decrease) Increase
Cash {Decrease)
t 69,000 Accounts payable
Accounts Receivable (net) 45,000 Bonds payable
t (51,000)
Inventory 127,000 92,000
Investments
Share Capital-Ordinary
139,000
{47,000)
Instructions
Compute the net income for the current year;
assuming that there \{rere no entries
except for net income ancl a dividencl in ihe Retained Earn_
dJciaratio ,, or iiE,ooo r,r.hich
::,1i;$:"nt rvas paid in the cur_

?{efuLxtu-
Problems L79

/----., Earnings) The foliorving account balances t{'ere included in the trial
I . T-.fi P4-5 llncome Statement, Retained
*,n**ce
*LJlL.-)\r--l-
of T\t'ain Corporation at June 30, 2010'

Sales $1,578,500 Depreciation of office furniture

Sales discounts 31,150 and equipment $ 7,250
Cost of goods sold 896,770 Real estate and other local taxes 7,320
Sales salaries 56,260 Bad debt expense-selling 4,850
Sales commissions 97,600 Bui lding expense-prorated
Travel expense-salespersons 28,930 to administration 9,130
Freight-out 21,400 Miscellaneous office expenses 6,000
Entertainment expense 14,820 Sales returns 62,300
Telephone and lnternet expense-sales 9,030 Dividends revenue 38,000
Depreciation of sales equipment 4,980 Bond interest expense 18,000
Building expense-prorated to sales 6,200 lncome tax 102,000
Miscellaneous selling expenses 4,715 Depreciation understatement
Office supplies used 3,450 due to error-2007 17,700
Telephone and fniernet exPense- Dividends declared on
administration 2,824 preference shares 9,000
Dividends declared on
ordinary shares 37,000

The Retained Earnings account had a balance of $337,000 at July 7,2A09. There are 80,000 ordinary
sirares outstanding.

lnstructions
Prepare an income staternent and a reiained earnings statemeirt for the year ended ]une 30,2010.