Accounting 550 week 2 homework assignment 2017
Accounting 550 week 2 homework assignment 2017
Subject: Business   / Accounting
Question
Homework
Chapter 4: E4-7, E4-13 & P4-1
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Chapter 4: E4-7
E4-7(LO2,3,4)(Multiple-Step and Single-Step Statements)The accountant of Latifa Shoe Co. has piled the following information from the company’s records as a basis for an income statement for the year ended December 31, 2017.
Rent revenue
$29,000
Interest expense
18,000
Market appreciation on land above cost
31,000
Salaries and wages expense (selling)
114,800
Supplies (selling)
17,600
Income tax
37,400
Salaries and wages expense (administrative)
$135,900
Other administrative expenses
51,700
Cost of goods sold
496,000
Net sales
980,000
Depreciation on plant assets (70% selling, 30% administrative)
65,000
Cash dividends declared
16,000
There were 20,000 shares of common stock outstanding during the year.
Instructions
(a)Prepare a multiple-step income statement.
(b)Prepare a single-step income statement.
(c)Which format do you prefer? Discuss.
E4-13
E4-13(LO4)(Earnings per Share)At December 31, 2016, Shiga Naoya Corporation had the following stock outstanding.
10% cumulative preferred stock, $100 par, 107,500 shares
$10,750,000
Common stock, $5 par, 4,000,000 shares
20,000,000
During 2017, Shiga Naoya did not issue any additional common stock. The following also occurred during 2017.
Income from continuing operations before taxes
$23,650,000
Discontinued operations (loss before taxes)
$3,225,000
Preferred dividends declared
$1,075,000
Common dividends declared
$2,200,000
Effective tax rate
35%
Instructions
Compute earnings per share data as it should appear in the 2017 income statement of Shiga Naoya Corporation. (Round to two decimal places.)
P4-1
P4-1(LO3,4,6)(Multiple-Step Statement, Retained Earnings Statement)The following information is related to Dickinson Company for 2017.
Retained earnings balance, January 1, 2017
$980,000
Sales revenue
25,000,000
Cost of goods sold
16,000,000
Interest revenue
70,000
Selling and administrative expenses
4,700,000
Write-off of goodwill
820,000
Income taxes for 2017
1,244,000
Gain on the sale of investments
110,000
Loss due to flood damage
390,000
Loss on the disposition of the wholesale division (net of tax)
440,000
Loss on operations of the wholesale division (net of tax)
90,000
Dividends declared on common stock
$250,000
Dividends declared on preferred stock
80,000
Dickinson Company decided to discontinue its entire wholesale operations (considered a discontinued operation) and to retain its manufacturing operations. On September 15, Dickinson sold the wholesale operations to Rogers Company. During 2017, there were 500,000 shares of common stock outstanding all year.
Instructions
Prepare a multiple-step income statement and a retained earnings statement.