Question

Presented below is information related to Tamarisk Company at December 31, 2020, the end of its first year of operations. Sales revenue $317,050 Cost of goods sold 144,760 Selling and administrative expenses 49,700 Gain on sale of plant assets 28,090 Unrealized gain on available-for-sale debt investments 9,890 Interest expense 6,250 Loss on discontinued operations 12,880 Dividends declared and paid 4,760

Compute the following: (a) Income from operations $enter a dollar amount (b) Net income $enter a dollar amount (c) Comprehensive income $enter a dollar amount (d) Retained earnings balance at December 31, 2020

Answer 1

Required amounts are calculated as follows:

B 1 Particulars Amount (S) 2 Sales 317050 3 Less: Cost of goods sold -144760 4. Less: Selling and administrative expenses -49700 5 (a) Income from operations =SUM(B2:B4) 7 Particulars Amount (S) 8 Sales 317050 9 Add: Gain on sales of plant assets 28090 10 Less: Cost of goods sold -144760 11 Less: Selling and administrative expenses -49700 12 Less: Interest expense -6250 13 (b) Net income =SUM(B8:B12) Amount (S) 144430 15 Particulars 16 Net income Add: Unrealized gain on available-for- 17 sale investment 18 Less: Loss on discontinued operations 19 (c) Comprehensive income 9890 1-12880 =SUM(B16:B18) Particulars 22 Comprehensive income 23 Less: Dividend declared and paid (d) Retained earnings balance at 24 December 31, 2020 Amount (S) 141440 -4760 =B22+B23

Resulting excel sheet is as follows:

Particulars 2 Sales 3 Less: Cost of goods sold 4 Less: Selling and administrative expenses 5 (a) Income from operations Amount (S) 317050 -144760 -49700 122590 7 Particulars 8 Sales 9 Add: Gain on sales of plant assets 10 Less: Cost of goods sold 11 Less: Selling and administrative expenses 12 Less: Interest expense 13 (b) Net income Amount (S) 317050 28090 -144760 -49700 -6250 144430 14 Amount (S) 144430 Ada 9890 -12880 141440 15 Particulars 16 Net income Add: Unrealized gain on available-for-sale 17 investment 18 Less: Loss on discontinued operations 19 (c) Comprehensive income 20 Particulars 22 Comprehensive income 23 Less: Dividend declared and paid (d) Retained earnings balance at 24 December 31, 2020 Amount (S) 141440 -4760 136680