The following income statement items appeared on the adjusted trial balance of S
ID: 2337641 • Letter: T
Question
The following income statement items appeared on the adjusted trial balance of Schembri Manufacturing Corporation for the year ended December 31, 2018 ($ in 000s): sales revenue, $17100; cost of goods sold, $7,100; selling expenses, $1,390; general and administrative expenses, $890; interest revenue, $160; interest expense, $210. Income taxes have not yet been recorded. The company's income tax rate is 40% on all items of income or loss. These revenue and expense items appear in the company's income statement every year. The company's controller, however, has asked for your help in determining the appropriate treatment of the following nonrecurring transactions that also occurred during 2018 ($ in 000s). All transactions are material in amount. 1. Investments were sold during the year at a loss of $310. Schembri also had unrealized gains of $400 for the year on investments 2. One of the company's factories was closed during the year. Restructuring costs incurred were $2,100 3. During the year, Schembri completed the sale of one of its operating divisions that qualifies as a component of the entity according to GAAP. The division had incurred a loss from operations of $620 in 2018 prior to the sale, and its assets were sold at a gain of $1,580 4. In 2018, the company's accountant discovered that depreciation expense in 2017 for the office building was understated by $290 5. Negative foreign currency translation adjustment for the year totaled $330. Required 1. Prepare Schembri's single, continuous multiple-step statement of comprehensive income for 2018, including earnings per share disclosures. One million shares of common stock were outstanding at the beginning of the year and an additional 400,000 shares were issued on July 1, 2018. 2. Prepare a separate statement of comprehensive income for 2018Explanation / Answer
S Manufacturing Company Income Statement for the yr ended Dec 31 2018 Particulars Amount Amount Sales $17,100 COGS $7,100 Gross Profit $10,000 Operating Exp Selling Exp $1,390 General and admin Exp $890 Restructuring Costs $2,100 Depreciation for 2017 $290 Total Operating Exp $4,670 Operating Profit $5,330 Interest Revenue $160 Interest Exp ($210) Other Income (Exp) ($50) Income before extra ordinary items and income tax $5,280 Income tax @ 40% $2,112.0 Income before extra ordinary items $3,168.0 Discontinued Operations Operating Loss from discontinued activties (Net of Tax) ($372) Profit on sale of discontinued unit Net of Tax $948 Net Income $3,744.0 Other Comprehensive Income Unrelaized gain from investment -net of tax $240 Foreign Currency Translation Adjustment-Net of tax ($198) Comprehensive Income $3,786.0 Earnings Per Share Net Income/No of shares common stock oS $3780000/1000000 $3.78 Common Shares at the beginning 1,000,000 Add Additional Shares 400000 Total OS Shares 1,400,000 Diluted Shares Adjusted Net income/Average no of common shares $3780000/1400000 $2.70
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