Income Statement Revenues Operating expenses *Infrequent item-lottery win Net income Balance Sheet Assets Liabilities Stockholders' equity:...

  

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Income Statement Revenues Operating expenses *Infrequent item-lottery win Net income Balance Sheet Assets Liabilities Stockholders' equity: Common stock Retained earnings Total liabilities and stockholders' equity *By definition, Infrequent items are not likely to recur in the future. Required Year 1 $ 722,000 (577,000) $ 145,000 0 $1,059,000 $ 241,000 457,000 361,000 $1,059,000 Year 2 $ 794,100 (634,600) 81,500 $ 241,000 $1,059,000 $0 457,000 602,000 $1,059,000 a-1. Compute the percentage of growth in net income from Year 1 to Year 2. a-2. Can stockholders expect a similar increase between Year 2 and Year 3? c. Assuming that SHB experiences the same percentage of growth from Year 2 to Year 3 as it did from-Year 1 to Year 2, determine the amount of income from continuing operations that the owners can expect to see on the Year 3 income statement. d. During Year 3, SHB experienced a $51,000 loss due to storm damage (note that this would be shown as an infrequent item on the income statement). Liabilities and common stock were unchanged from Year 2 to Year 3. Use the information you computed in Requirement c, plus the additional information provided in the previous two sentences, to prepare an income statement and balance sheet as of December 31, Year 3. dows Complete this question by entering your answers in the tabs below. Req A1 Req A2 Req C Amount of income from operations Req D Inc Stmt Req D Bal Sheet Assuming that SHB experiences the same percentage of growth from Year 2 to Year 3 as it did from Year 1 to Year 2, determine the amount of income from continuing operations that the owners can expect to see on the Year 3 income statement. Income Statement Revenues Operating expenses *Infrequent item-lottery win Net income Balance Sheet Assets Liabilities Stockholders' equity: Common stock Retained earnings Total liabilities and stockholders' equity *By definition, Infrequent items are not likely to recur in the future. Required Year 1 $ 722,000 (577,000) $ 145,000 0 $1,059,000 $ 241,000 457,000 361,000 $1,059,000 Year 2 $ 794,100 (634,600) 81,500 $ 241,000 $1,059,000 $0 457,000 602,000 $1,059,000 a-1. Compute the percentage of growth in net income from Year 1 to Year 2. a-2. Can stockholders expect a similar increase between Year 2 and Year 3? c. Assuming that SHB experiences the same percentage of growth from Year 2 to Year 3 as it did from-Year 1 to Year 2, determine the amount of income from continuing operations that the owners can expect to see on the Year 3 income statement. d. During Year 3, SHB experienced a $51,000 loss due to storm damage (note that this would be shown as an infrequent item on the income statement). Liabilities and common stock were unchanged from Year 2 to Year 3. Use the information you computed in Requirement c, plus the additional information provided in the previous two sentences, to prepare an income statement and balance sheet as of December 31, Year 3. dows Complete this question by entering your answers in the tabs below. Req A1 Req A2 Req C Amount of income from operations Req D Inc Stmt Req D Bal Sheet Assuming that SHB experiences the same percentage of growth from Year 2 to Year 3 as it did from Year 1 to Year 2, determine the amount of income from continuing operations that the owners can expect to see on the Year 3 income statement.

Answer rating: 100% (QA)

a1 Year 1 Year 2 Net income 145000 241000 96000 Increase age increase 9... View the full answer