Acct 550 Week 2 Homework Assignment
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ACCT 550 Week 2 Homework Assignment
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E4-4 (Multiple-Step and Single-Step) Two accountants for the firm of Allen and Wright are arguing about the merits of presenting an income statement in a multiple-step versus a single-step format. The discussion involves the following 2012 information related to Webster Company ($000 omitted).
Administrative expense | |
Officers’ salaries | $ 4,900 |
Depreciation of office furniture and equipment | 3,960 |
Cost of goods sold | 63,570 |
Rent revenue | 17,230 |
Selling expense | |
Transportation-out | 2,690 |
Sales commissions | 7,980 |
Depreciation of sales equipment | 6,480 |
Sales revenue | 96,500 |
Income tax expense | 7,580 |
Interest expense | 1,860 |
Instructions
(a) Prepare an income statement for the year 2012 using the multiple-step form. Common shares outstanding for 2012 total 40,550 (000 omitted).
(b) Prepare an income statement for the year 2012 using the single-step form.
(c) Which one do you prefer? Discuss.
E4-12 (Earnings per Share) At December 31, 2011, Schroeder Corporation had the following stock outstanding.
8% cumulative preferred stock, $100 par, 107,500 shares | $10,750,000 |
Common stock, $5 par, 4,000,000 shares | 20,000,000 |
During 2012, Schroeder did not issue any additional common stock. The following also occurred during 2012.
Income from continuing operations before taxes | $21,650,000 |
Discontinued operations (loss before taxes) | 3,225,000 |
Preferred dividends declared | 860,000 |
Common dividends declared | 2,200,000 |
Effective tax rate | 35% |
Instructions
Compute earnings per share data as it should appear in the 2012 income statement of Schroeder Corporation. (Round to two decimal places.)
P4-1 (Multiple-Step Income, Retained Earnings) Presented below is information related to Dickinson Company for 2012.
Retained earnings...
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E4-4 (Multiple-Step and Single-Step) Two accountants for the firm of Allen and Wright are arguing about the merits of presenting an income statement in a multiple-step versus a single-step format. The discussion involves the following 2012 information related to Webster Company ($000 omitted).
Administrative expense | |
Officers’ salaries | $ 4,900 |
Depreciation of office furniture and equipment | 3,960 |
Cost of goods sold | 63,570 |
Rent revenue | 17,230 |
Selling expense | |
Transportation-out | 2,690 |
Sales commissions | 7,980 |
Depreciation of sales equipment | 6,480 |
Sales revenue | 96,500 |
Income tax expense | 7,580 |
Interest expense | 1,860 |
Instructions
(a) Prepare an income statement for the year 2012 using the multiple-step form. Common shares outstanding for 2012 total 40,550 (000 omitted).
(b) Prepare an income statement for the year 2012 using the single-step form.
(c) Which one do you prefer? Discuss.
E4-12 (Earnings per Share) At December 31, 2011, Schroeder Corporation had the following stock outstanding.
8% cumulative preferred stock, $100 par, 107,500 shares | $10,750,000 |
Common stock, $5 par, 4,000,000 shares | 20,000,000 |
During 2012, Schroeder did not issue any additional common stock. The following also occurred during 2012.
Income from continuing operations before taxes | $21,650,000 |
Discontinued operations (loss before taxes) | 3,225,000 |
Preferred dividends declared | 860,000 |
Common dividends declared | 2,200,000 |
Effective tax rate | 35% |
Instructions
Compute earnings per share data as it should appear in the 2012 income statement of Schroeder Corporation. (Round to two decimal places.)
P4-1 (Multiple-Step Income, Retained Earnings) Presented below is information related to Dickinson Company for 2012.
Retained earnings...