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Lewis Corporation
experienced a fire on December 31, 2015, in which its financial records were
partially destroyed. It has been able to salvage some of the records and has
ascertained the following balances.
December
31, 2015 December 31,
2014
Cash $ 30,000 $ 10,000
Receivables (net) 85,000 125,000
Inventory 200,000 180,000
Accounts payable 50,000 90,000
Notes payable 30,000 60,000
Common stock, $100 par 400,000 400,000
Retained earnings 130,000 101,000
Additional information:
1. The
inventory turnover is 4 times
2. The return on common stockholders’ equity is
20%. The company had no additional paid-in capital.
3. The
accounts receivable turnover is 8.6 times.
4. The
return on assets is 16%.
5. Total
assets at December 31, 2014, were $685,000.
Instructions
Compute the
following for Lewis Corporation.
(a) Cost of goods sold for 2015.
(b) Net sales (credit) for 2015.
(c) Net income for 2015.
(d) Total assets at December 31, 2015.
Ex. 217
For its
fiscal year ending December 31, 2014, Conner Corporation reported the following
partial data
Income
before income taxes $1,200,000
Income
tax expense (30% x 950,000) 285,000
Income
before extraordinary items 915,000
Extraordinary
loss from flood 250,000
Net
income $665,000
The flood
loss is considered an extraordinary item. The income tax rate is 30% on all
items.
Instructions
Prepare a
correct income statement, beginning with income before income taxes.
