Question

You have been given the following information as of December 31, 2020: Sales revenue: $5,900,000 Interest revenue: $40,000 Loss on sale of investments: $10,000 Unrealized Loss on debt investments: $160,000 Gain on sale of discontinued operations: $260,000 Cost of goods sold: $4,400,000 Selling expense: $400,000 Restructuring costs: $190,000 Interest expense: $20,000 Dividend revenue: $15,000 General and administrative expense: $300,000 The company had 100,000 shares of stock outstanding throughout the year. Income tax expense has not yet been accrued. The effective tax rate is 21%. Calculate (a) Operating Income (b) Income from Continuing Operations after tax (c) Net Income, and (d) Comprehensive Income.

Answer 1

Sales		$          5,900,000.00
Cost of Goods Sold		$        (4,400,000.00)
Gross Profit		$          1,500,000.00
Operating Expense
Selling Expenses	$    400,000.00
Adminstrative expenses	$    300,000.00	$            (700,000.00)
Operating Income		$              800,000.00
Other Income/(expenses)
Interest Revenue	$      40,000.00
Dividend Reveue	$      15,000.00
Loss on Sale of Investment	$    (10,000.00)
Interest expense	$    (20,000.00)
Restrutring Cost	$ (190,000.00)	$            (165,000.00)
Income Before Taxes		$              635,000.00
Income Tax Expense		$            (133,350.00)
Income from Continuing Operations		$              501,650.00
Discountined Operations
Gain on disposal of discontined component (net of tax)	$    205,400.00	$              205,400.00
Net Income		$              707,050.00
Other Comprehensive Income adjustments from certain investments		$            (160,000.00)
Comprehensive Income		$              547,050.00