Safarl File Edit View History Bookmarks Window Help ezto.mheducation.com In 2016

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Safarl File Edit View History Bookmarks Window Help ezto.mheducation.com In 2016, Kim Company sold land for $104,000 cash. The land had originally cost $54,000. Also, Kim sold inventory that had cost $189,000 for $284,000 cash. Operating expenses amounted to $44,000 Required a. Prepare a 2016 multistep income statement for Kim Company. KIM COMPANY Income Statement For the year ended December 31, 2016 Expenses Non-Operating Items b. Assume that normal operating activities grow evenly by 26% during 2017 Prepare a 2017 multistep income statement for Kim Company. KIM COMPANY MacBook Pro

Explanation / Answer

A) Answer

Kim company

Income statement

For the Year end decmber 2016

Sale of inventory. $284000

Cost of inventory. $189000

operating income. $95000

Operating expenses $44000

Net operating income $51000

Non operating income

Sale of land $104000

Cost of land $54000

Profit on sale of land $50000

Total income in year 2016 $101000

B) Answer

Kim company

Income statement

For the year ended decmber 2017

Sale of inventory. $357840

Cost of inventory. $238140

Operating profit $119700

Operating expenses. $55440

Net operating profit $64260

Non operating income

Sale of land. $104000

Cost of land. $54000

Profit on land. $50000

Totla income $114260

C) Answer

Net income of decmber 2016. $101000

Net income of decmber 2017 $114260

Change in net income $13260

Percentage change in net income $13260/ $101000 =13.13%

D) Answer

Yes

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