Question - Computation of Net Income
Presented below are changes in all the account balances of Chris Park Furniture Co. during the current year, except for retained earnings. Increase (Decrease) Cash $252,800, Accounts Receivable (net) 144,000, Inventory 406,400, Investments (150,400). Increase (Decrease) Account Payable $(163,200), Bonds Payable 262,400, Common Stock 400,000, Additional Paid-in Capital 41,600.
Instructions: Compute the net income for the current year, assuming that there were no entries in the Retained Earnings account except for net income and a dividend declaration of $60,800 which was paid in the current year.
Question - Single-step Income Statement
The financial records of Leon Paul Inc. were destroyed by fire at the end of 2012. Fortunately the controller had kept certain statistical data related to the income statement as presented below. 1. The beginning merchandise inventory was $184,000 and decreased 20% during the current year. 2. Sales discounts amount to $34,000. 3. 20,000 shares of common stock were outstanding for the entire year. 4. Interest expense was $40,000. 5. The income tax rate is 30%. 6. Cost of goods sold amounts to $1,000,000. 7. Administrative expenses are 20% of cost of goods sold but only 8% of gross sales. 8. Four-fifths of the operating expenses relate to sales activities. Operating expenses consist of selling and administrative expenses.
Instructions: From the foregoing information, prepare an income statement for the year 2012 in single-step form.