Brief Exercise 4-3
Ayayai Corporation had net sales of $2,429,400 and interest revenue of $34,300 during 2017. Expenses for 2017
were cost of goods sold $1,454,500, administrative expenses $214,500, selling expenses $299,000, and interest
expense $48,800. Ayayai’s tax rate is 30%. The corporation had 109,600 shares of common stock authorized
and 70,840 shares issued and outstanding during 2017. Prepare a condensed multiple-step income statement for
Ayayai Corporation. (Round earnings per share to 2 decimal places, e.g. 1.48.)
AYAYAI CORPORATION
Income Statement
$
$
$
$
Brief Exercise 4-5
Indigo Corporation had income from operations of $6,391,800. In addition, it suffered an unusual and infrequent
pretax loss of $771,700 from a volcano eruption, interest revenue of $18,240, and a write-down on buildings of
$53,630. The corporation’s tax rate is 30%. Prepare a partial income statement for Indigo beginning with Income
from operations. The corporation had 4,980,500 shares of common stock outstanding during 2017. (Round earnings
per share to 2 decimal places, e.g. 1.48.)
INDIGO CORPORATION
Income Statement (Partial)
$
$
$
$
Exercise 4-5
Two accountants for the firm of Elwes and Wright are arguing about the merits of
presenting an income statement in a multiple-step versus a single-step format.
The discussion involves the following 2017 information related to Swifty Company
($000 omitted).
Administrative expense
Officers' salaries
Depreciation of office furniture and equipment
$4,972
4,032
Cost of goods sold
60,642
Rent revenue
17,302
Selling expense
Delivery expense
2,762
Sales commissions
8,052
Depreciation of sales equipment
6,552
Sales revenue
96,572
Income tax
9,142
Interest expense
1,932
Common shares outstanding for 2017 total 40,550 (000 omitted).
Prepare an income statement for the year 2017 using the multiple-step form. (Round earnings per share to
2 decimal places, e.g. 1.48.)
SWIFTY COMPANY
Income Statement
(In thousands, except earnings per share)
$
$
$
$
$
Prepare an income statement for the year 2017 using the single-step form. (Round earnings per share to 2
decimal places, e.g. 1.48.)
SWIFTY COMPANY
Income Statement
(In thousands, except earnings per share)
$
$
$
Exercise 4-9
Presented below is information related to Splish Corp. for the year 2017.
Net sales
Cost of goods sold
Selling expenses
$1,333,000
788,500
65,900
Write-off of inventory due to obsolescence
$81,850
Depreciation expense omitted by accident in 2016
48,500
Casualty loss
51,800
Administrative expenses
52,000
Cash dividends declared
Dividend revenue
22,100
Retained earnings at December 31, 2016
Interest revenue
8,060
42,890
926,130
Effective tax rate of 34% on all items
Prepare a multiple-step income statement for 2017. Assume that 58,890 shares of common stock are
outstanding. (Round earnings per share to 2 decimal places, e.g. 1.49.)
SPLISH CORP.
Income Statement
$
$
$
Prepare a separate retained earnings statement for 2017. (List items that increase adjusted retained
earnings first.)
SPLISH CORP.
Retained Earnings Statement
$
:
:
$
Brief Exercise 4-4
Sage Corporation had income from continuing operations of $10,811,000 in 2017. During 2017, it disposed of its
restaurant division at an after-tax loss of $205,400. Prior to disposal, the division operated at a loss of
$319,800 (net of tax) in 2017 (assume that the disposal of the restaurant division meets the criteria for
recognition as a discontinued operation). Sage had 10,000,000 shares of common stock outstanding during
2017. Prepare a partial income statement for Sage beginning with income from continuing operations. (Round
earnings per share to 2 decimal places, e.g. 1.48.)
SAGE CORPORATION
Income Statement (Partial)
$
$
$
$
$
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Exercise 4-17 (Part Level Submission)
The following information was taken from the records of Flint Inc. for the year 2017: Income tax applicable to
income from continuing operations $132,906; income tax applicable to loss on discontinued operations $26,588,
and unrealized holding gain on available-for-sale securities (net of tax) $21,300.
Gain on sale of equipment
Loss on discontinued
operations
Administrative expenses
$97,200 Cash dividends declared
78,200
Retained earnings January 1,
2017
$155,200
644,700
247,800 Cost of goods sold
857,100
Rent revenue
46,000 Selling expenses
302,100
Loss on write-down of
inventory
64,200 Sales Revenue
Shares outstanding during 2017 were 105,200.
(a)
1,718,900
Prepare a multiple-step income statement. (Round earnings per share to 2 decimal places, e.g. 1.48.)
FLINT INC.
Income Statement
$
:
$
:
$
$
(b)
Prepare a comprehensive income statement for 2017, using the two statement format.
FLINT INC.
Comprehensive Income Statement
$
$
(c)
Prepare a retained earnings statement for 2017. (List items that increase retained earnings first.)
FLINT INC.
Retained Earnings Statement
$
:
:
$
Exercise 4-13
At December 31, 2016, Sweet Corporation had the following stock outstanding.
10% cumulative preferred stock,
$100 par, 108,214 shares
Common stock, $5 par, 4,029,700 shares
$10,821,400
20,148,500
During 2017, Sweet did not issue any additional common stock. The following also occurred during 2017.
Income from continuing operations before taxes
$22,695,800
Discontinued operations (loss before taxes)
$3,396,000
Preferred dividends declared
$1,082,140
Common dividends declared
$2,098,800
Effective tax rate
35 %
Compute earnings per share data as it should appear in the 2017 income statement of Sweet
Corporation. (Round answers to 2 decimal places, e.g. 1.48.)
Earnings Per Share
$
$