Question

1. Read all the instructions and answer all the questions.
2. Please be sure to include ALLcalculations so that partial credit can be given.
3. Do NOT copy the problem and questions into your answers. Please just show the problem number and the appropriate letter for each answer

On January 1, 2018, Jammin’ Company owns 40 percent (40,000 shares) of Benji, Inc., which it purchased several years ago for $364,000. Since the date of acquisition, the equity method has been properly applied, and the carrying amount of the investment account as of January 1, 2018, is $587,200. Excess patent cost amortization of $24,000 is still being recognized each year. During 2018, Benji reports net income of $684,000 and a $240,000 other comprehensive loss, both incurred uniformly throughout the year. No dividends were declared during the year. Jammin’ sold 8,000 shares of Benji on August 1, 2018, for $186,000 in cash. However, Jammin’ retains the ability to significantly influence the investee.

Required:

Prepare the following financial statements for Jammin in good form for the year ended 2018 using the following summarized data for 2018 that the Assistant Controller gave you:

Description	Amount
Sales	$1,700,000
Cost of Goods Sold	600,000
Other Expenses	416,000
Dividends Paid	300,000
Retained Earnings, 1/1/18	468,000

1. Income statement for Jammin’ Company. Please show calculations so that partial credit can be granted.
2. Statement of comprehensive income for Jammin’ Company. Please show calculations so that partial credit can be granted.
3. Statement of retained earnings for Jammin’ Company. Please show calculations so that partial credit can be granted.

Answer 1

answer:

A B 1, Statement of Income for the year ended Income Amount(S) Revenue from operations Other income 17,00,000 Total income 17,00,000 Expenses Cost of raw material and components consumed(COGS) OtherExpenses 6,00,000 4,16,000 10,16,000 6,84,000 24,000 Total expenses Earning before interest, tar, depreciation and amortization (EBITDA) tion and amortization expense Finance costs Profit before tax Tax expense Profit/(Loss) for the year 6,60,000 6,60,000 2. Other comprehensive income for the vear, net of tax Othe r comprehensive loss 40 Total comprehensive income/(loss) for the year 4,20,000 3. Statement of Retain Earning Opening Retained Earning on 1/1/2018 Add- Eaming after Tax Less-Dividend paid (of Last year) Closing Retained Earning 4,68,000 6,60,000 3.00 8,28,000