Exercise 8.

On 2014 December 31, RodCast Company, the accounting records showed:

Net sales$807,000,Gross profit$177,000,Net income $35,000,Income tax expense $15,000,Selling, general, and administrative expenses $87,000

Compute Company's cost of goods sold, income from operations, incomebefore taxes, and interest expense.

Solution:

Net Sales$807,000

Cost of Goods Sold630, 000 ( this missing value you must calculated)

Gross Profit$177,000

Selling, general, and administrative expenses$87,000

Income From Operations(177,000 - 87,000)= $90,000 ( this missing value you must calculated)

Interest Expense(90,000-50,000)= $40,000 ( this missing value you must calculated)

Income Before Taxes(35,000+15,000)=$50,000 ( this missing value you must calculated)

Income Taxes$15,000

Net Income$35,000

Exercise 9.

On 2014 December 31, Lidowski Company, the accounting records showed:

Net sales

$180,000

Gross profit

$100,000

Net income

$25,000

Income tax expense

$9,000

Selling, general, and administrative expenses

$16,500

Compute Company's cost of goods sold, income from operations, income before taxes, and interest expense.

Net Sales

$150,00

Cost of Goods Sold

Gross Profit

Selling, general, and administrative expenses

Income From Operations

Interest Expense

Income Before Taxes

Income Taxes

Net Income

Required:

Calculate cost of goods sold, income from operations, income before taxes, and interest expense.

Exercise 5.

On 2014 December 31, Bryniuk's Company, the accounting records showed the following information:

Assets

$750,000

Liabilities

$250,000

Capital Stock

$500,000

Earned revenues

$195,000

Incurred expenses

$97,000

Dividends declared and paid amounted to

$18,000

1. Prepare the Statement of Stockholders' Equity on 2014 December 31.

Exercise 2. Applying Basic Accounting Equation

Dan and Den, Inc. reports the following assets and liabilities. Compute the totals that would appear in the corporation's basic accounting equation (Assets = Liabilities + Stockholders' Equity (Capital Stock)).

Cash

$50,000

Accounts Payable

15,000

Supplies

1,000

Loan Payable

9,000

Inventory

15,000

Answer:

Assets

= Liabilities

+ Stockholders' Equity