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Presented below is information related to Sunland Company at December 31, 2017, the end of its first year of operations.
Sales revenue $327,980
Cost of goods sold 148,580
Selling and administrative expenses 52,100
Gain on sale of plant assets 30,840
Unrealized gain on available-for-sale investments 9,370
Interest expense 6,060
Loss on discontinued operations 11,970
Dividends declared and paid 5,190
Compute the following:
(a) Income from operations $
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(b) Net income $
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(c) Comprehensive income $
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(d) Retained earnings balance at December 31, 2017 $
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Sagot :

Zviko

Answer:

Part a

Income from operations calculation

Sales revenue                                                            $327,980

Less Cost of goods sold                                           ($148,580)

Gross Profit                                                                 $179,400

Less Operating Expenses

Selling and administrative expenses                        ($52,100)

Income from operations                                             $127,300

Part b

Net Income calculation

Income from operations                                                               $127,300

Non-Operating items

Gain on sale of plant assets                                        $30,840

Unrealized gain on available-for-sale investments      $9,370

Interest expense                                                          ($6,060)   $34,150

Net Income                                                                                   $161,450

Part c

Comprehensive income calculation

Net Income (from continuing activities)                   $161,450

Less Loss on discontinued operations                    ($11,970)

Comprehensive income                                           $149,480

Part d

Comprehensive income                                           $149,480

Less Dividends declared and paid                            ($5,190)

Retained Earnings                                                    $144,290

Explanation:

Income from Operations = Sales less Operating Expenses

Net Income = Income from Operations add or less Non Operating items

Comprehensive Income = Income from Continuing Activities + Income from discontinued Activities

Retained Income = Comprehensive Income less Dividends declared and paid.

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