The adjusted trial balance of Pacific Scientific Corporation on December 31, 201

Question

The adjusted trial balance of Pacific Scientific Corporation on December 31, 2018, the end of the company's fiscal year, contained the following income statement items (S in millions): sales revenue, $2,106; cost of goods sold, $1,240; selling expenses, S126; general and administrative expenses, $105; interest expense, $35; and gain on sale of investments, $45. Income tax expense has not yet been recorded. The income tax rate is 40%. Prepare a single-step income statement for 2018 Ignore EPS disclosures BE 4-3 Multiple-step income statement LO4-1, LO4-3 Refer to the situation described in BE 4-1. Prepare a multiple-step income statement for 2018. Ignore EPS disclosures. BE 4-4 Multiple-step income statement LO4-1, LO4-3 The following is a partial year-end adjusted trial balance. Account Title Sales revenue Loss on sale of investments Interest revenue Cost of goods sold General and administrative expenses Restructuring costs Selling expenses Income tax expense Debits Credits 300,000 22,000 4,000 160,000 40,000 50,000 25,000 Income tax expense has not yet been recorded. The income tax rate is 40%. Determine the following: (a) operating income (loss), (b) income (loss) before income taxes, and (c) net income (loss)

Explanation / Answer

BE 4-1;

Single Step Income Statement for 2018

Revenues;

Sales revenues

$2106

Gain on sale of investment

$45

Total revenues

$2151

Expenses;

Cost of goods sold

$1240

Selling expenses

$126

General and administrative expenses

$105

Interest expense

$35

Income tax ($645 * 0.4)

$258

Total expenses

$1764

Net income

$387

BE 4-3;

Muti-Step Income Statement for 2018

Sales revenues

$2106

Less: Cost of goods sold

($1240)

Gross profit

$866

Operating expenses;

Selling expenses

$126

General and administrative expenses

$105

Total operating expenses

($231)

Operating income

$635

Non-operating and other items;

Interest expense

($35)

Gain on sale of investment

$45

Total non-operating and other

$10

Net income before taxes

$645

Income tax ($645 * 0.4)

($258)

Net income

$387

BE 4-4;

Muti-Step Income Statement

Sales revenues

$300000

Less: Cost of goods sold

($160000)

Gross profit

$140000

Operating expenses;

Selling expenses

$25000

General and administrative expenses

$40000

Total operating expenses

($65000)

Operating income

$75000

Non-operating and other items;

Interest revenue

$4000

Loss on sale of investment

($22000)

Restrucring costs

($50000)

Total non-operating and other items

($68000)

Net income before taxes

$7000

Less: Income tax ($7000 * 0.4)

($2800)

Net income

$4200

Single Step Income Statement for 2018

Revenues;

Sales revenues

$2106

Gain on sale of investment

$45

Total revenues

$2151

Expenses;

Cost of goods sold

$1240

Selling expenses

$126

General and administrative expenses

$105

Interest expense

$35

Income tax ($645 * 0.4)

$258

Total expenses

$1764

Net income

$387

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.