Brief Exercise 4–3
PACIFIC SCIENTIFIC CORPORATION
Income Statement
For the Year Ended December 31, 2018
($ in millions)
Operating expenses:
Selling………………………………………………………. $126
Other income (expense):
Gain on sale of investments ………………………… 45
Brief Exercise 4–4
(a) Sales revenue $300,000
(b) Operating income $25,000
(c)
Income before income taxes $ 7,000
Brief Exercise 4–5
WHITE AND SONS, INC.
Partial Income Statement
For the Year Ended December 31, 2018
Income from continuing operations before income taxes. . . $ 850,000
Loss on discontinued operations, net of $160,000 tax
Earnings per share:
Income from continuing operations………………………………. $ 5.10
Note: Restructuring costs, interest revenue, and loss on sale of investments are
included in income from continuing operations before income taxes.
Brief Exercise 4–6
REVOLUTIONARY INDUSTRIES
Partial Income Statement
For the Year Ended December 31, 2018
Income from continuing operations before income taxes. . . $ 12,000,000
Discontinued operations:
Income from operations of discontinued component
* $12,000,000 × 40%
** Income from operations of discontinued component:
Brief Exercise 4–7
CALIFORNIA MICROTECH CORPORATION
Partial Income Statement
For the Year Ended December 31, 2018
Income from continuing operations before income taxes. . . $ 5,800,000
Discontinued operations:
Loss from operations of discontinued component
(including gain on disposal of $2,000,000)** …………………….. (1,600,000)
* $5,800,000 x 30%
** Loss from operations of discontinued component:
Gain on sale of assets $ 2,000,000 ($10 million less $8 million)
Brief Exercise 4–8
CALIFORNIA MICROTECH CORPORATION
Partial Income Statement
For the Year Ended December 31, 2018
Discontinued operations:
Loss from operations of discontinued component** ….... (3,600,000)
** Includes only the loss from operations. There is no impairment loss.
Brief Exercise 4–9
CALIFORNIA MICROTECH CORPORATION
Partial Income Statement
For the Year Ended December 31, 2018
Discontinued operations:
Loss from operations of discontinued component
(including impairment loss of $1,000,000)** ……………………… (4,600,000)
* $5,800,000 x 30%
** Loss from operations of discontinued component:
Impairment loss ($8 million book value less
$7 million net fair value) $(1,000,000)
Brief Exercise 4–10
O’REILLY BEVERAGE COMPANY
Statement of Comprehensive Income
For the Year Ended December 31, 2018
Net income …………………………………………………. $650,000
Other comprehensive income (loss):
Brief Exercise 4–11
Cash flows from operating activities:
Collections from customers $ 660,000
Only these four cash flow transactions relate to operating activities. The others are
investing and financing activities.
Brief Exercise 4–12
Cash flows from investing activities:
Proceeds from note receivable collection $100,000
Cash flows from financing activities:
Brief Exercise 4–13
Cash flows from operating activities:
Net income $45,000
Adjustments for noncash effects:
Brief Exercise 4–14
Under IFRS, interest received and interest paid usually are classified as
investing and financing cash flows, respectively, not operating cash flows as with
U.S. GAAP. The revised cash flow categories usually would appear as follows:
Cash flows from operating activities:
Cash flows from investing activities:
Proceeds from note receivable collection $100,000
Cash flows from financing activities:
Issuance of common stock $200,000