Homework 3 - Cost

Homework 3

E4-14

(a) Net income in 2017=$460,000*(1-35%)=$299,000

(b) Cumulative effect=($395,000-$370,000+$420,000-$390,000)* (1-35%)=$35,750

(c)                        2008          2009          2010

   Income before tax      $ 395,000      $ 420,000      $ 460,000

   Income Tax             138,250        147,000       161,000

   Net Income         $ 256,750      $ 273,000      $ 299,000

P4-3

                                   Maher Inc.

                               INCOME STATEMENT

                       FOR THE YEAR ENDED DECEMBER 31, 2011                      

Income before tax                     $ 644,500(790,000-90,000+1,500-57,000)

Income Tax                            193,350

Income from continuing operations       $ 451,150

Discontinued Operations

  Income from insurance(nontaxable)       196,000

  Loss on disposal of recreational           (80,500)

    division,less applicable income tax

Net income                           $ 566,650

Earnings per share=$566,650/120,000=$ 4.72

E22-15

1. Accumulated Depreciation--Machine   30,600

     Depreciation Expense                    10,200

     Retained Earnings                       20,400

2. Retained Earnings                   45,000

    Sales salaries payable                      45,000

4. Amortization Expense                2,250

  Retained Earnings                   4,500

    Copyright                               6,750

5. Cost of goods sold                   87,000

    Retained Earnings                        87,000