PLEASE ANSWER ALL PARTS!!!! Exercise 4-9 IVAN CALDERON CORP. Income Statement Fo
ID: 2501121 • Letter: P
Question
PLEASE ANSWER ALL PARTS!!!!
Exercise 4-9
IVAN CALDERON CORP.
Income Statement
For the Year Ended December 31, 2014
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IVAN CALDERON CORP.
Retained Earnings Statement
For the Year Ended December 31, 2014
PLEASE ANSWER ALL PARTS!!!!
Exercise 4-9
Presented below is information related to Ivan Calderon Corp. for the year 2014.Net sales $1,316,000 Write-off of inventory due to obsolescence $84,300 Cost of goods sold 781,100 Depreciation expense omitted by accident in 2013 42,400 Selling expenses 73,100 Casualty loss (extraordinary item) before taxes 57,900 Administrative expenses 54,600 Cash dividends declared 45,300 Dividend revenue 28,100 Retained earnings at December 31, 2013 986,300 Interest revenue 7,400 Effective tax rate of 34% on all items
Explanation / Answer
Answer:
(a) Ivan Calderon Corp.
Income Statement
For the Year Ended December 31, 2014
Sales Revenue
Net sales
$1,316,000
Cost of goods sold....................................................................
(781,100)
Gross profit on sales......................................................
534900
Operating Expenses
Selling expenses..................................................................
$73,100
Administrative expenses.....................................................
54600
(127700)
Income from operations..................................................................
407,200
Other Revenues and Gains
Dividend revenue...............................................................
28,100
Interest revenue..................................................................
7,400
35,500
44,2700
Other Expenses and Losses
Write-off of inventory due to obsolescence.......................
84,300
Casualty loss.......................................................................
57,900
(14,2200)
Income before income tax..............................................................
300,500
Income tax..........................................................................
(102,170)
Net income ............................................................................................
$ 198,330
(b) Ivan Calderon Corp.
Retained Earnings Statement
For the Year Ended December 31, 2014
Retained earnings, Jan. 1, as reported.......................................................................
$ 986,300
Correction for overstatement of net income in prior period
(depreciation error) (net of $14416 tax)........................................................
(27,984)
Retained earnings, Jan. 1, as adjusted.......................................................................
958,316
Add: Net income.......................................................................................................
198,330
1,156646
Less: Dividends declared..........................................................................................
(45,300)
Retained earnings, Dec. 31.......................................................................................
$1,111346
(a) Ivan Calderon Corp.
Income Statement
For the Year Ended December 31, 2014
Sales Revenue
Net sales
$1,316,000
Cost of goods sold....................................................................
(781,100)
Gross profit on sales......................................................
534900
Operating Expenses
Selling expenses..................................................................
$73,100
Administrative expenses.....................................................
54600
(127700)
Income from operations..................................................................
407,200
Other Revenues and Gains
Dividend revenue...............................................................
28,100
Interest revenue..................................................................
7,400
35,500
44,2700
Other Expenses and Losses
Write-off of inventory due to obsolescence.......................
84,300
Casualty loss.......................................................................
57,900
(14,2200)
Income before income tax..............................................................
300,500
Income tax..........................................................................
(102,170)
Net income ............................................................................................
$ 198,330
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