Q3.The following is an income statement for GAMA Company for the year ended December 31, 2019.
GAMA Company
Income Statement
For the Year Ended December 31, 2019
Net sales SAR800,000
Costs and expenses:
Cost of goods sold 640,000
Selling, general, and administrative expenses 70,000
Other, net 20,000 730,000
Income before income taxes 70,000
Income taxes 21,000
Net income SAR 49,000
Additional information:
1. "Selling, general, and administrative expenses" included a charge of SAR7,000 for impairment of intangibles.
2. "Other, net" consisted of interest expense, SAR10,000, and a discontinued operations loss of SAR10,000 before taxes. If the loss had not occurred, income taxes for 2019 would have been SAR24,000 instead of SAR21,000.
3. GAMA had 20,000 ordinary shares outstanding during 2019.
Instructions
Prepare a corrected income statement, including the appropriate per share disclosures.(3 marks)
*Answer Question
* No Pic or hand writing
Prepare a corrected income statement, including the appropriate per share disclosures
Gama Company | ||
Income Statement | ||
For the year ended december 31, 2019 | ||
Net Sales | 800,000 | |
Less: Cost and Expenses: | ||
Cost of goods sold | 640,000 | |
Selling, general, and administrative expenses (70,000 - 7,000) | 63,000 | |
Interest expenses | 10,000 | |
Infrequent charge-Loss on sale of investments | 7,000 | |
Total costs and expenses | 720,000 | |
Income from continuing operation before taxes | 80,000 | |
Income taxes | 24,000 | |
Income from continuing operation | 56,000 | |
Less: Extraordinary loss: | ||
Earthquake damage | 10,000 | |
Less: Applicable taxes (24,000 - 21,000) | 3,000 | 13,000 |
Net Income | 43,000 | |
Per share of common stock | ||
Income from continuing operation ($56,000/20,000 shares) | $2.80 | |
Discontinued operations loss, net of tax ($13000/20,000 shares) | ($0.65) | |
Net income/(loss) ($43,000/20,000) | $2.15 |
Q3.The following is an income statement for GAMA Company for the year ended December 31, 2019....
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