ACCT 3311 Intermediate Accounting

1. A company has discontinued operations for Division G. The following information is available for operating activities of Division G:

Revenue $1,500,000

Expenses $600,000

Tax rate is 30%

The book value of net assets for Division G is $340,000

(assets of $940,000 minus liabilities of $600,000)

The fair value of net assets for Division G is $210,000

Show the Results from Discontinued Operations that would appear on the income Statement related to Division G.

2. Given the following account balances, prepare a multi-step income statement to arrive at Net Income.

Sales (net) $200,000

Cost of Goods Sold $100,000

Interest revenue $4,000

Loss from strike $9,000

General & Administrative Expenses $25,000

Selling Expenses $30,000

Tax rate 25%, common shares outstanding during the year were 40,000.

3. The Long Horn Music Store had the following transactions during the month of December 2019.

Dec 1 Made credit sales of $1,475; cost of inventory sold $785

Dec 4 purchased $1,500 worth of inventory, paying $1,000 with cash.

Dec 7 sold equipment that cost $1,900 for $2,300. The equipment was fully depreciated and had no salvage value.

Dec 10 paid wages of $1,250 and salaries of $3,250

Dec 18 purchased new equipment of $3,780 paying $1,780 in cash and signing a 90 day note for the remainder.

Dec 24 made cash sales of $1,235; cost of inventory sold $650

Dec 29 paid the remainder of the Dec 4 inventory purchase

Additional events concerning Long Horn Music for 2019 are described below:

a. On September, 2019, a two-year insurance policy was purchased for $2,400. The payment was debited to prepaid insurance.

b. On January 1, 2019, the office supplies account had a $500 balance. Supplies costing $3,100 were purchased during the year. At December 31, an inventory count showed $100 of supplies on hand.

c. On December 31, 2014, $4,800 of unpaid employee salaries had accumulated. No entry for these salaries has been recorded.