(a) The following information was taken from the records of Teal Inc. for the ye
ID: 2610440 • Letter: #
Question
(a)
The following information was taken from the records of Teal Inc. for the year 2017: Income tax applicable to income from continuing operations $194,310; income tax applicable to loss on discontinued operations $28,628, and unrealized holding gain on available-for-sale securities (net of tax) $16,900.Gain on sale of equipment $98,700 Cash dividends declared $147,000 Loss on discontinued operations 84,200 Retained earnings January 1, 2017 589,500 Administrative expenses 243,600 Cost of goods sold 861,700 Rent revenue 46,600 Selling expenses 307,900 Loss on write-down of inventory 62,900 Sales Revenue 1,902,300
Shares outstanding during 2017 were 98,300.
Explanation / Answer
a) Teal Inc.
Income Statement
For the year ended December 31, 2017 (Amount in $)
Revenues Sales Revenue 1,902,300 Rent Revenue 46,600 Total Revenues (A) 1,948,900 Expenses Cost of goods sold 861,700 Selling Expenses 307,900 Administrative Expenses 243,600 Total Expenses (B) 1,413,200 Income from continuing operations before tax (C = A - B) 535,700 Income tax (D) 194,310 Income from continuing operations (E = C - D) 341,390 Discontinued Operations Loss on discontinued operations 84,200 Less: Applicable income tax reduction (28,628) Net Loss from discontinued operations (F) 55,572 Income before extraordinary items (G = E - F) 285,818 Extraordinary items: Gain on sale of equipment (H) 98,700 Loss on write-down of inventory (I) (62,900) Net Income (G + H - I) 321,618 Per share of Common Stock: Income from Continuing operations ($341,390/98,300) 3.47 Loss on discontinued operations net of tax ($55,572/98,300) (0.56) Income before extraordinary items ($285,818/98,300) 2.91 Extraordinary gain ($98,700/98,300) 1.00 Extraordinary loss ($62,900/98,300) (0.64) Net Income ($321,618/98,300) 3.27Related Questions
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