=+Rainbow Paint Co.s comparative financial statements for the years ending December 31, 2010 and 2009, are as
Question:
=+Rainbow Paint Co.’s comparative financial statements for the years ending December 31, 2010 and 2009, are as follows. The market price of Rainbow Paint Co.’s common stock was $30 on December 31, 2009, and $25 on December 31, 2010.
Rainbow Paint Co.
Comparative Income Statement For the Years Ended December 31, 2010 and 2009
$ 3,257,600 57,600
$3,200,000 2,080,000
$1,120,000
$ 464,000 224,000
$ 688,000
$ 432,000 19,200
$ 451,200 64,000
$ 387,200 176,000
$ 211,200 Sales Sales returns and allowances Net sales Cost of goods sold Gross profit Selling expenses Administrative expenses Total operating expenses Income from operations Other income Other expense (interest)
Income before income tax Income tax expense Net income
$5,125,000 125,000
$5,000,000 3,400,000
$1,600,000
$ 650,000 325,000
$ 975,000
$ 625,000 25,000
$ 650,000 105,000
$ 545,000 300,000
$ 245,000 2010 2009
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