1. ACC 557 Homework Chapter 15
(E15-4, E15-7, E15-11, E15-12, P15-3, P15-8A)
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E15-4
The comparative condensed income statements of Hendi Corporation are shown
below.
HENDI CORPORATION
Comparative Condensed Income Statements
For the Years Ended December 31
2009
2008
Net sales
$600,000
$500,000
Cost of goods sold
483,000
420,000
Gross profit
117,000
80,000
Operating expenses
57,200
44,000
Net income
2. $ 59,800
$ 36,000
E15-7
Bennis Company has the following comparative balance sheet data.
BENNIS COMPANY
Balance Sheets
December 31
2009
2008
Cash
$ 15,000
$ 30,000
Receivables (net)
70,000
60,000
Inventories
60,000
50,000
Plant assets (net)
200,000
180,000
$345,000
$320,000
Accounts payable
$50,000
3. $60,000
Mortgage payable (15%)
100,000
100,000
Common stock, $10 par
140,000
120,000
Retained earnings
55,000
40,000
$345,000
$320,000
Additional information for 2009:
Net income was $25,000. Sales on account were $410,000. Sales returns and
allowances were $20,000. Cost of goods sold was $198,000.
E15-11
Scully Corporation's comparative balance sheets are presented below.
SCULLY CORPORATION
Balance Sheets
December 31
2008
2007
Cash
$ 4,300
$ 3,700
5. 23,130
20,000
Total
$110,500
$120,100
Scully's 2008 income statement included net sales of $100,000, cost of goods
sold of $60,000, and net income of $15,000.
15-12
For its fiscal year ending October 31, 2008, Molini Corporation reports the
following partial data.
Income before income taxes
$540,000
Income tax expense (30% $390,000)
117,000
Income before extraordinary items
423,000
Extraordinary loss from flood
150,000
Net income
$273,000
The flood loss is considered an extraordinary item. The income tax rate is 30% on
all items.
P15-3
Condensed balance sheet and income statement data for Kersenbrock
Corporation appear below.
KERSENBROCK CORPORATION
Balance Sheets
6. December 31
2009
2008
2007
Cash
$ 25,000
$ 20,000
$ 18,000
Receivables (net)
50,000
45,000
48,000
Other current assets
90,000
95,000
64,000
Investments
75,000
70,000
45,000
Plant and equipment (net)
400,000
370,000
358,000
$640,000
7. $600,000
$533,000
Current liabilities
$ 75,000
$ 80,000
$ 70,000
Long-term debt
80,000
85,000
50,000
Common stock, $10 par
340,000
310,000
300,000
Retained earnings
145,000
125,000
113,000
$640,000
$600,000
$533,000
KERSENBROCK CORPORATION
P15-8A
Cheaney Corporation owns a number of cruise ships and a chain of hotels. The
hotels, which have not been profitable, were discontinued on September 1, 2008.
The 2008 operating results for the company were as follows.
8. Operating revenues
$12,850,000
Operatingexpenses
8,700,000
Operating income
$ 4,150,000
Analysis discloses that these data include the operating results of the hotel chain,
which were: operating revenues $2,000,000 and operating expenses
$2,400,000.The hotels were sold at a gain of $200,000 before taxes. This gain is
not included in the operating results. During the year, Cheaney suffered an
extraordinary loss of $800,000 before taxes, which is not included in the operating
results. In 2008, the company had other revenues and gains of $100,000, which
are not included in the operating results. Thecorporationisinthe 30%
incometaxbracket.
