Exercise 4–5
AXEL CORPORATION
Income Statement
For the Year Ended December 31, 2018
Sales revenue ………………………………………………. $ 592,000
Operating expenses:
Selling …………………………………………………….. $67,000
Other income (expense):
Interest and dividends ………………………………… 32,000
Exercise 4–6
CHANCE COMPANY
Partial Income Statement
For the Year Ended December 31, 2018
Income from continuing operations ……………………………… $ 350 ,000
Discontinued operations:
Loss from operations of discontinued component
Earnings per share:
* Loss on discontinued operations:
Loss on sale of assets $(400,000)
Exercise 4–7
ESQUIRE COMIC BOOK COMPANY
Partial Income Statement
For the Year Ended December 31, 2018
Income from continuing operations * ……………………………. $552 ,000
Discontinued operations:
Income from operations of discontinued component
* Income from continuing operations:
Income before considering additional items $1,000,000
Exercise 4–8
Requirement 1
KANDON ENTERPRISES, INC.
Partial Income Statement
For the Year Ended December 31, 2018
Income from continuing operations ……………………………… $ 400 ,000
Discontinued operations:
Loss from operations of discontinued component
* Loss on discontinued operations:
Loss from operations $(140,000)
Exercise 4–8 (concluded)
Requirement 2
KANDON ENTERPRISES, INC.
Partial Income Statement
For the Year Ended December 31, 2018
Income from continuing operations ……………………………… $ 400 ,000
Discontinued operations:
*Includes only the operating loss during the year. There is no impairment loss.
Exercise 4–9
Pretax income from continuing operations $14,000,000
operations.
*1 – tax rate of 40% = 60%
Pretax income of division $4,000,000
Exercise 4–10
Earnings per share:
Exercise 4–11
THE MASSOUD CONSULTING GROUP
Statement of Comprehensive Income
For the Year Ended December 31, 2018
Net income …………………………………………………. $1,354,000
Other comprehensive income (loss):
Exercise 4–12
1. b _ Purchase of equipment for cash.
2. a _ Payment of employee salaries.
3. a _ Collection of cash from customers.
4. c _ Cash proceeds from a note payable.
Exercise 4–13
Bluebonnet Bakers
Statement of Cash Flows
For the Year Ended December 31, 2018
Cash flows from operating activities:
Collections from customers $ 380,000
Interest on note receivable 6,000
Cash flows from investing activities:
Collection of note receivable 50,000
Cash flows from financing activities:
Proceeds from note payable 100,000
Exercise 4–14
Cash collected for interest, considered an operating cash flow by U.S. GAAP,
Cash paid for interest, considered an operating cash flow by U.S. GAAP,
Cash paid for dividends, considered a financing cash flow by U.S. GAAP,
BLUEBONNET BAKERS
Statement of Cash Flows
For the Year Ended December 31, 2018
Cash flows from operating activities:
Collections from customers $ 380,000
Cash flows from investing activities:
Collection of note receivable 50,000
Cash flows from financing activities:
Proceeds from note payable 100,000
Interest on note payable (5,000)
Exercise 4–15
Cash flows from operating activities:
Net income $17,300
Adjustments for noncash effects:
Changes in operating assets and liabilities:
Increase in accounts receivable (4,000)
Decrease in inventory 5,500
Exercise 4–16
Requirement 1
Operating Investing Financing
1. $300,000
2. $(10,000)
3.
4.