Question 1 Nabb & Fry Co. reports net income of $27,000. Interest allowances are Nabb $6,200 and Fry $4,800, salary allowances are Nabb $15,400 and Fry $10,000, and the remainder is shared equally. Show the distribution of income. (If an amount reduces the account balance then enter with a negative sign preceding the number e.g.-15,000 or parenthesis e.g. (15,000).) Division of Net Income Nabb Fry Total Salary allowance $ $ Interest allowance Remaining excess/deficiency Total division of net income Question 2 Culver Corporation is authorized to issue 24,500 shares of $50 par value, 10% preferred stock and 125,000 shares of $5 par value common stock. On January 1, 2020, the ledger contained the following stockholders' equity balances. Preferred Stock (11,500 shares) Paid in Capital in Excess of Par-Preferred Stock Common Stock (68,000 shares) Paid in Capital in Excess of Par-Common Stock Retained Earnings $575,000 73,000 340,000 710,000 350,000 During 2020, the following transactions occurred. Feb. 1 Issued 2,200 shares of preferred stock for land having a fair value of $124,000. Mar. 1 Issued 1,200 shares of preferred stock for cash at $65 per share. July 1 Issued 15,000 shares of common stock for cash at $8 per share. Sept. 1 Issued 400 shares of preferred stock for a patent. The asking pnce of the patent was $32,000. Market price for the preferred stock was $70 and the fair value for the patent was indeterminable. Dec. 1 Issued 8,000 shares of common stock for cash at $8.50 per share. Dec. 31 Net income for the year was $258,000. No dividends were dedared. Joumalize the transactions and the dosing entry for net income. (Record journal entries in the order presented in the problem. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit o The following information is available for Ivanhoe Corporation for the year ended December 31, 2020: sales revenue $795,000, other revenues and gains $96,000, operating expenses $107,000, cost of goods sold $469,000, other expenses and losses $32,000, and preferred stock dividends $39,950. The company's tax rate was 35%, and it had 60,000 shares outstanding during the entire year. (a) Prepare a corporate income statement. (List other revenues before other expenses.) IVANHOE CORPORATION Income Statement V > > $ > > NOSKER COMPANY Income Statement For the Year Ended December 31, 2020 Sales revenue Cost of goods sold Gross profit Operating expenses Income from operations Interest expense Income before income taxes Income tax expense Net income $241,750 175,400 66,350 23,750 42,600 2,100 40,500 7,200 $33,300 Additional data: 1. Dividends declared and paid were $30,100. 2. During the year, equipment was sold for $8,350 cash. This equipment cost $17,800 originally and had a book value of $8,350 at the time of sale. 3. All depreciation expense, $15,450, is in the operating expenses. 4. All sales and purchases are on account. Question 1 Nabb & Fry Co. reports net income of $27,000. Interest allowances are Nabb $6,200 and Fry $4,800, salary allowances are Nabb $15,400 and Fry $10,000, and the remainder is shared equally. Show the distribution of income. (If an amount reduces the account balance then enter with a negative sign preceding the number e.g.-15,000 or parenthesis e.g. (15,000).) Division of Net Income Nabb Fry Total Salary allowance $ $ Interest allowance Remaining excess/deficiency Total division of net income Question 2 Culver Corporation is authorized to issue 24,500 shares of $50 par value, 10% preferred stock and 125,000 shares of $5 par value common stock. On January 1, 2020, the ledger contained the following stockholders' equity balances. Preferred Stock (11,500 shares) Paid in Capital in Excess of Par-Preferred Stock Common Stock (68,000 shares) Paid in Capital in Excess of Par-Common Stock Retained Earnings $575,000 73,000 340,000 710,000 350,000 During 2020, the following transactions occurred. Feb. 1 Issued 2,200 shares of preferred stock for land having a fair value of $124,000. Mar. 1 Issued 1,200 shares of preferred stock for cash at $65 per share. July 1 Issued 15,000 shares of common stock for cash at $8 per share. Sept. 1 Issued 400 shares of preferred stock for a patent. The asking pnce of the patent was $32,000. Market price for the preferred stock was $70 and the fair value for the patent was indeterminable. Dec. 1 Issued 8,000 shares of common stock for cash at $8.50 per share. Dec. 31 Net income for the year was $258,000. No dividends were dedared. Joumalize the transactions and the dosing entry for net income. (Record journal entries in the order presented in the problem. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit o The following information is available for Ivanhoe Corporation for the year ended December 31, 2020: sales revenue $795,000, other revenues and gains $96,000, operating expenses $107,000, cost of goods sold $469,000, other expenses and losses $32,000, and preferred stock dividends $39,950. The company's tax rate was 35%, and it had 60,000 shares outstanding during the entire year. (a) Prepare a corporate income statement. (List other revenues before other expenses.) IVANHOE CORPORATION Income Statement V > > $ > > NOSKER COMPANY Income Statement For the Year Ended December 31, 2020 Sales revenue Cost of goods sold Gross profit Operating expenses Income from operations Interest expense Income before income taxes Income tax expense Net income $241,750 175,400 66,350 23,750 42,600 2,100 40,500 7,200 $33,300 Additional data: 1. Dividends declared and paid were $30,100. 2. During the year, equipment was sold for $8,350 cash. This equipment cost $17,800 originally and had a book value of $8,350 at the time of sale. 3. All depreciation expense, $15,450, is in the operating expenses. 4. All sales and purchases are on account.