Accounting 550 week 2 homework assignment 2017

Subject: Business    / Accounting
Question
Homework

Chapter 4: E4-7, E4-13 & P4-1

After completion of the homework, put the completed assignment in the Dropbox provided for the homework for this week. A solutions file for the Week 2 Assignments will be provided at the end of the week.

Submit your assignment to the Dropbox, located at the top of this page. For instructions on how to use the Dropbox, read these .equella.ecollege.com/file/8ff9f27a-3772-48cf-9855-4bec4e6706bf/1/Dropbox.html”>step-by-step instructions.

See the Syllabus section “Due Dates for Assignments & Exams” for due date information.

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.