Exercise 4-8 (Part Level Submission) Presented below are selected ledger account

Question

Exercise 4-8 (Part Level Submission) Presented below are selected ledger accounts of Bonita Corporation as of December 31, 2017. Cash Administrative expenses Selling expenses Net sales Cost of goods sold Cash dividends declared (2017) Cash dividends paid (2017) Discontinued operations (loss before income taxes) Depreciation expense, not recorded in 2016 Retained earnings, December 31, 2016 Effective tax rate 30% $59,200 106,300 83,010 542,800 265,200 20,600 18,300 46,800 39,100 96,130 ? (a) | Your answer is correct. Compute net income for 2017 Net income 29,043 SHOW SOLUTIONSHOW ANSWER LINK TO TEXT LINK TO TEXT

Explanation / Answer

Ans a)

COMPUTATION OF NET INCOME FOR 2017

BONITA CORPORATION FOR THE YEAR DECEMBER 31, 2017

Ans b)

BONITA CORPORATION INCOME STATEMENT

Discontinued Operation (loss) Less Applicable Income Tax

($ 46,800 - $ 14,040)

Income Tax = 46,800 * 30 % = $ 14,040

Note :

Income Before Income Tax = Gross Profit Less (Admistrative Expense + Selling Expense)

= $ 2,77,600 - ($ 106,300 + $ 83,010 )

   = $ 88,290

Earnig Per Share = Net Income After Tax / Outstanding shares

PARTICULARS AMOUNT AMOUNT Net Sales $ 5,42,800 Less : Cost of Goods Sold $ 2,65,200 Gross Profit $ 2,77,600 Less Operating Expense Administative Expense $ 106,300 Selling Expense $ 83,010 Loss from Discontinued Operations $ 46,800 $ 236,110 Net Income Before Income Tax $ 41,490 Less : Income Tax ( $ 41,490 * 30 % ) $ 12, 447 Net Income $ 29, 043

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