Question

Partial Trial Balance for the Year Ended December 31, 2018 Sales revenue $1,800,000 Interest revenue (Not...

Partial Trial Balance for the Year Ended December 31, 2018

Sales revenue

$1,800,000

Interest revenue (Not part of operations)

       80,000

Realized gain on sale of Equipment

       50,000

Cost of goods sold

1,100,000

Selling and administrative expenses

    220,000

Loss on Discontinued Operations

    100,000

Shivers and Shivers had 100,000 shares of stock outstanding throughout the year. Income tax expense has not yet been accrued. The effective tax rate is 20%.

Net Income for the Year Ended December 31, 2018?

Homework Answers

Answer #1
Income Statement
Revenues
Sales revenue 1,800,000
Cost of goods sold -1,100,000
Gross profit 700,000
Operating expenses:
Selling and administrative expenses -220,000
Total Operating expenses -220,000
Operating Profit 480,000
Other revenues:
Interest revenue (Not part of operations) 80,000
Realized gain on sale of Equipment 50,000
130,000
Profit before tax 610,000
Income tax expense ( 20% of 610,000) -122,000
Net Income from continuing operations 488,000
Less :loss on discontinued operations, net of taxes (100,000 - 100,000 x 20%) 80,000 -80,000
Net Income $408,000
Earning per share { ( Net Income/ Number of common shares) {(408,000/100,000) $           4.08

Net Income for the Year Ended December 31, 2018 is $408,000.

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