Alternate Exercises and Problems 4–1
Chapter 4 The Income Statement, Comprehensive Income,
and the Statement of Cash Flows
EXERCISES
Exercise 4-1
Requirement 1
APEX COMPUTER CORPORATION
Income Statement
For the Year Ended December 31, 2016
Revenues and gains:
Sales ………………………………………………………..
$3,400,000
Interest revenue …………………………………………
Gain on sale of equipment ………………………….
Expenses and losses:
Cost of goods sold ……………………………………..
$2,250,000
Administrative expense ……………………………….
450,000
Selling expense ………………………………………….
Restructuring costs …………………………………….
Interest expense …………………………………………
Income before income taxes …………………………
Income tax expense * ………………………………….
4–2 Intermediate Accounting, 8/e
Exercise 4-1 (concluded)
Requirement 2
APEX COMPUTER CORPORATION
Income Statement
For the Year Ended December 31, 2016
Sales revenue ……………………………………………….
$3,400,000
Cost of goods sold ………………………………………..
Gross profit ………………………………………………….
Operating expenses:
Administrative expense ……………………………….
$450,000
Selling expense …………………………………………..
Restructuring costs …………………………..………..
Operating income …………………………………………
Other income (expense):
Interest revenue ………………………………………….
35,000
Gain on sale of investments …………………………
30,000
Interest expense …………………………………………
Income before income taxes …………………………..
Income tax expense * …………………………………….
Net income ………………………………………………….
Alternate Exercises and Problems 4–3
Exercise 4-2
BILIBONG COMPANY
Income Statement
For the Year Ended December 31, 2016
Income from continuing operations ………………………………
$ 500,000
Discontinued operations:
Loss from operations of discontinued component
Loss on discontinued operations ………………………………….
Net income ……………………………………………………….……….
Earnings per share:
Income from continuing operations ………………………………
Loss from discontinued operations ……………………………….
Net income ……………………………………………………….……….
* Loss on discontinued operations:
Gain on sale of assets $300,000
4–4 Intermediate Accounting, 8/e
Exercise 4-3
Requirement 1
OTTOBONI CORPORATION
Income Statement
For the Year Ended December 31, 2016
Income from continuing operations ……………………………..
$600,000
Discontinued operations:
Net income ……………………………………………………………….
$318,000
* Loss on discontinued operations:
Loss from operations $ (270,000)
Alternate Exercises and Problems 4–5
Exercise 4-3 (concluded)
Requirement 2
OTTOBONI CORPORATION
Income Statement
For the Year Ended December 31, 2016
Income from continuing operations ………………………………
$ 600,000
Discontinued operations:
Net income ……………………………………………………….……….
$ 438,000
4–6 Intermediate Accounting, 8/e
Exercise 4-4
THE RUFUS and CLEFT MINING COMPANY
Statement of Comprehensive Income
For the Year Ended December 31, 2016
Net income ………………………………………………….
$2,122,000
Other comprehensive income (loss):
Total other comprehensive income …………………
Comprehensive income …………………………………
$2,182,000
Exercise 4-5
1. d Purchase of equipment in exchange for a note payable.
Alternate Exercises and Problems 4–7
Exercise 4-6
Requirement 1 Siegfried & Royce
Statement of Cash Flows
For the Year Ended December 31, 2016
($ in thousands)
Cash flows from operating activities:
Net income $1,410
Adjustments for noncash effects:
4–8 Intermediate Accounting, 8/e
Requirement 2 Siegfried & Royce
Statement of Cash Flows
For the Year Ended December 31, 2016
($ in thousands)
Cash flows from operating activities:
Collections from customers $12,230 (1)
(1) $12,500 less $270 increase in accounts receivable.
Alternate Exercises and Problems 4–9
PROBLEMS
Problem 4-1
AJAX COMPANY
Income Statement
For the Year Ended December 31, 2016
Sales revenue …………………………..…………………
$6,200,000
Cost of goods sold ………………………………………
Operating expenses:
Administrative and selling …………………………
$1,500,000
Restructuring costs …………………………..……….
Loss from landslide damage ………………………
Total operating expenses ………………………..
Operating income ………………………………………..
Other income (expense):
Interest revenue ………………………………………..
100,000
Interest expense ………………………………………..
Loss on sale of investments ……………………….
Income before income taxes ………………………….
785,000
Income tax expense ……………………………………..
Net income …………………………………………………
$ 471,000
4–10 Intermediate Accounting, 8/e
Problem 4-2
Requirement 1
HUNTINGTON STEEL CORPORATION
Comparative Income Statements
For the Years Ended December 31
2016
2015
Income from continuing operations before
income taxes [1] ……………………………………
$4,355,000
$3,475,000
Income tax expense …………………………………..
Income from continuing operations …………….
Discontinued operations:
Income tax expense ………………………………..
Income on discontinued operations ……………..
Net Income ………………………………………………
[1] Income from continuing operations before income taxes:
2016 2015
Unadjusted $3,900,000 $3,800,000
[2] Income from discontinued operations:
2016 2015
Income (loss) from operations $(455,000) $ 325,000
Alternate Exercises and Problems 4–11
Problem 4-2 (concluded)
Requirement 2
The 2016 income from discontinued operations would include only the loss from
Requirement 3
The 2016 income from discontinued operations would include the loss from