Presented below is information (in thousands) related to Chen Company.
Retained earnings, December 31, 2018 ¥ 650,000
Sales revenue 1,400,000
Selling and administrative expenses 240,000
Loss on disposal of component (pre-tax) 260,000
Cash dividends declared on ordinary shares 33,600
Cost of goods sold 830,000
Gain resulting from computation error on depreciation charge in 2017 (pre-tax) 520,000
Rent revenue 120,000
Impairment loss 90,000
Interest expense 10,000
Instructions
Prepare in good form an income statement for the year 2019. Assume a 30% tax rate and that there were 70,000 ordinary shares outstanding during the year.
Chen Company
INCOME STATEMENT
For the Year Ended December 31, 2019 (in ¥)
| Sales | 1,400,000 |
| Cost of goods sold | 830,000 |
| Gross profit | 570,000 |
| Selling and Administrative expenses | 240,000 |
| Other income - rent revenue | 120,000 |
| Impairment loss | 90,000 |
| Income from operations | 360,000 |
| Interest expense | 10,000 |
|
Income before taxes |
350,000 |
| Income taxes | (105,000) |
| Income from Continuing Operations | 245,000 |
| Discontinued operations, net of applicable income taxes of ¥78,000 | (182,000) |
| Net Income | 63,000 |
Per share-
Income from continuing operating ¥3.5
Discontinued operations net of tax (2.6)
Net Income ¥0.90
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