Proprietary theory- entity theory- Residual theory
Examine the following documents:
Revenues---------------------------------------------------------------- $1,000,000
Operating expenses
-Cost of good sold ------------------------ $400,000
-Depreciation------------------------------ $100,000
- Salaries and Wages----------------------$200,000
Bond interest (80%debentures sold at maturity
value of $100,000)----------------------------------------------------------$80,000
Dividend declared on 6%preferred stock (per value $500,000)--------$30,000
Dividends declared of $5 per share on common stock
(20,000 shares outstanding -----------------------------------------------$100,000
Based on this information you are to complete:
Determine the income under each of the following equity theories:
Proprietary theory- entity theory- Residual theory