80.2K

Verified Solution

Link Copied!

28....Income Statement and Retained Earnings The Huff Company presents the following partial list of account balances taken from its December 31, 2016 adjusted trial balance:

Sales (net)	$123,000			Operating expenses	$25,000
Interest expense	5,000			Common stock, $5 par	5,500
Cost of goods sold	54,000			Retained earnings, 1/1/2016	49,700

The following information is also available for 2016 and is not reflected in the preceding accounts:

The common stock has been outstanding all year. A cash dividend of $1.46 per share was declared and paid.

Land was sold at a pretax gain of $5,100.

Division X (a major component of the company) was sold at a pretax gain of $4,660. It had incurred a $9,440 pretax operating loss during 2016.

A tornado, which is an unusual event in the area, caused a $5,340 pretax loss.

The income tax rate on all items of income is 30%.

The average shareholders' equity is $90,000.

Required:

1. Prepare a 2016 multiple-step income statement for Huff. Round earnings per share computations to two decimal places.

HUFF COMPANY
Income Statement (Multi-Step)
For Year Ended December 31, 2016
		$
		$
		$
Other items
	$
		$
		$
Results from discontinued operations
	$
		$
Components of Income		EPS
		$
		$

2. Prepare a 2016 retained earnings statement.

HUFF COMPANY
Statement of Retained Earnings
For Year Ended December 31, 2016
	$
	$
	$

3. Compute the 2016 return on common equity. Round to one decimal place.

%

26...

Statement of Cash Flows

The following are several items involving the cash flow activities of the ROCKY HORROR PICTURE CO. for 2016:

Net income, $53,800

Payment of dividends, $15,600

Ten-year, $36,500 bonds payable were issued at face value

Depreciation expense, $11,200

Building acquired at a cost of $35,400

Accounts receivable decreased by $2,700

Accounts payable decreased by $4,000

Equipment acquired at a cost of $5,800

Inventories increased by $6,900

Beginning cash balance, $27,200

Required:

Prepare Rocky Horror Picture's statement of cash flows for 2016 using the indirect method. Use a minus sign for any negative amounts.

ROCKY HORROR PICTURE CO.
Statement of Cash Flows
For Year Ended December 31, 2016
Net Cash Flow From Operating Activities
	$
Adjustments for differences between income flows and cash flows from operating activities:
		$
Cash Flows From Investing Activities
	$
Cash Flows From Financing Activities
	$
		$
		$

Answer & Explanation Solved by verified expert

See Answer