Question

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.

Answer 1

GAMA company Income statement for the year Ended December 31, 2019 Particulars Net sales Cotal Revenue bonusar gow Amount we woon on SAR 800,000 ninapod all SAR 800,000 costs and Expenses and took a l cost of goode sold it not Selling General and Adm-Expenie Loss on impaiment of intangibles others, net (interest Expense) Total Supenses SAR 640ooo SAR 63,000 SAR 7,000 SAR 10,000 SAR 720,000 Income before taxes on SAR 80,000 Leur-Income Taxes and to w SAR ZHODO Income after fodes from SAR 56,000 continuing operations Income after topes from (SAR 7,000) důcontinuid operations Total income after taxes WAN SAR 49,000 for the year farningk Per Shore (SAR 19,000/20,000shares) SAR 27.5) Calculation Income ofte faxes from discontinued Oralions shalle Loss from ducontinued operations Lent Income toutes (SAR 24000 SAR21,000 Loss after taxes SAR 10,000 SAR 3,000 SAR 7.000 I