Textbook:

Intermediate Accounting, 19th Edition

Earl K. Stice; James D. Stice

Chapter 4 Exercise # 29

Analysis and Preparation of Income Statement

The selling expenses of Caribou Inc. for 2013 are 13% of sales. General expenses, excluding doubtful accounts, are 25% of cost of goods sold but only 15% of sales. Doubtful accounts are 2% of sales. The beginning inventory was $136,000, and it decreased 30% during the year. Income from operations for the year before income taxes of 30% is $160,000. Extraordinary gain, net of tax of 30%, is $21,000.

Prepare an income statement, including earnings-per-share data. Caribou Inc. has 130,000 shares of common stock outstanding. For earnings per share computations, round your answer to the nearest cent.

Sales

COGS

Beginning Inventory

Net Purchases

COG Available for sale

Less: Ending Inventory

COGS

Gross Profit on sales

Operating Expenses:

Selling expenses

General expenses (Inc bad debts)

Income before Income taxes & Extraordinary Items

Income Taxes

Income before Extraordinary Items

Extraordinary Gain (net of income taxes of $9000)

Net Income

Earnings Per Share:

Income before extraordinary items

Extraordinary gain

Net income