Question

Joe Schreiner, controller for Founder Company Inc., recently prepared the company's income statement and statement of changes in equity for 2017. Schreiner believes that the statements are a fair presentation of the company's financial progress during the current period, but he also admits that he has not examined any recent professional pronouncements on accounting. FLOUNDER COMPANY INC. Income Statement For the Year Ended December 31, 2017 Sales revenues Less: Sales returns and allowances Net sales revenue Cost of goods sold S 388,800 15,370 373,430 s 51,100 Inventory, January 1, 2017 Purchases Less: Purchase discounts Cost of goods available for sale Inventory, December 31, 2017 Cost of goods sold $ 190,000 2,820 187,180 238,280 42,660 195,620 177,810 Gross profit Selling expenses Administrative expenses Income before income tax Other revenues and gains 43,020 33,300 76,320 101,490 Unrealized gain on FV-OCI investments Dividends received 37,600 41,600 180,690 54,207 126,483 Income tax Net income

Answer 1