Question 2
The following information is to be used for the preparation ofthe income statement of Lucky Fin Enterprises for the year endedDecember 31, 2015. Lucky Fin Enterprises is composed principally ofLucky Fin Sporting Goods and Lucky Fin Pool & Swim Equipment.Lucky Fin is presenting its income statement for the 2015 year onlyâ no prior years will be presented.
Rental Revenue
Dividend Revenue
Accounts Payable
Market appreciation on land above cost
Selling Expenses
Cash
Sales
Common Stock
Property & Equipment
Cost of Goods Sold
Accounts Receivable
Administrative Expenses
Inventory
Dividends on Common Stock
Retained Earnings, 1/1/15
$ 90,000
12,000
42,000
40,000
352,000
60,000
1,400,000
300,000
100,000
490,000
73,000
270,000
64,000
15,000
43,000
Lucky Fin Enterprisesâ income tax rate is 40% for all items andhas 200,000 shares of weighted common stock outstanding. Inaddition to the account balances presented above, Fin providedinformation regarding the following transactions, which have notyet been recorded as of 12/31/15:
(1) During 2015, Fin sold one ofthe securities from its portfolio for a loss of $40,000.
(2) During 2015, Finrealized that depreciation had been improperly calculated andrecorded during 2014. This error would have increased income in2014. The pretax effect of the error was $4,000.
(3) Fin decided on June1, 2015 to dispose of his Pool & Swim Equipment division. Thedivision qualifies as a component under US GAAP. The loss fromoperations of the division from January 1 thru June 1 totaled$60,000.The loss on disposal of the division was $55,000.
REQUIRED:
A. Prepare amultiple-step income statement for Lucky Fin Enterprises for theyear ended 12/31/15.
B. Prepare a Statement of RetainedEarnings for Lucky Fin Enterprises for the year ended 12/31/15.
Question 2
The following information is to be used for the preparation ofthe income statement of Lucky Fin Enterprises for the year endedDecember 31, 2015. Lucky Fin Enterprises is composed principally ofLucky Fin Sporting Goods and Lucky Fin Pool & Swim Equipment.Lucky Fin is presenting its income statement for the 2015 year onlyâ no prior years will be presented.
| Rental Revenue Dividend Revenue Accounts Payable Market appreciation on land above cost Selling Expenses Cash Sales Common Stock Property & Equipment Cost of Goods Sold Accounts Receivable Administrative Expenses Inventory Dividends on Common Stock Retained Earnings, 1/1/15 | $ 90,000 12,000 42,000 40,000 352,000 60,000 1,400,000 300,000 100,000 490,000 73,000 270,000 64,000 15,000 43,000 |
Lucky Fin Enterprisesâ income tax rate is 40% for all items andhas 200,000 shares of weighted common stock outstanding. Inaddition to the account balances presented above, Fin providedinformation regarding the following transactions, which have notyet been recorded as of 12/31/15:
(1) During 2015, Fin sold one ofthe securities from its portfolio for a loss of $40,000.
(2) During 2015, Finrealized that depreciation had been improperly calculated andrecorded during 2014. This error would have increased income in2014. The pretax effect of the error was $4,000.
(3) Fin decided on June1, 2015 to dispose of his Pool & Swim Equipment division. Thedivision qualifies as a component under US GAAP. The loss fromoperations of the division from January 1 thru June 1 totaled$60,000.The loss on disposal of the division was $55,000.
REQUIRED:
A. Prepare amultiple-step income statement for Lucky Fin Enterprises for theyear ended 12/31/15.
B. Prepare a Statement of RetainedEarnings for Lucky Fin Enterprises for the year ended 12/31/15.
