The following income statement items appeared on the adjusted trial balance of Schembri Manufacturing Corporation for...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
The following income statement items appeared on the adjusted trial balance of Schembri Manufacturing Corporation for the year ended December 31, 2021 ($ in thousands): sales revenue, $18,100; cost of goods sold, $7,600; selling expenses, $1,440; general and administrative expenses, $940; interest revenue, $200; interest expense, $300. Income taxes have not yet been recorded. The company's income tax rate is 25% on all items of income or loss. These revenue and expense items appear in the company's income statement every year. The company's controller, however, has asked for your help in determining the appropriate treatment of the following nonrecurring transactions that also occurred during 2021 ($ in thousands). All transactions are material in amount. 1. Investments were sold during the year at a loss of $360. Schembri also had an unrealized gain of $500 for the year on investments in debt securities that qualify as components of comprehensive income. 2. One of the company's factories was closed during the year. Restructuring costs incurred were $1,700. 3. During the year, Schembri completed the sale of one of its operating divisions that qualifies as a component of the entity according to GAAP. The division had incurred a loss from operations of $700 in 2021 prior to the sale, and its assets were sold at a gain of $1,680. 4. In 2021, the company's accountant discovered that depreciation expense in 2020 for the office building was understated by $340. 5. Negative foreign currency translation adjustment for the year totaled $400. Required: 1. Prepare Schembri's single, continuous multiple-step statement of comprehensive income for 2021, including earnings per share disclosures. One million shares of common stock were outstanding at the beginning of the year and an additional 400,000 shares were issued on July 1, 2021. 2. Prepare a separate statement of comprehensive income for 2021. SCHEMBRI MANUFACTURING CORPORATION Statement of Comprehensive Income For the Year Ended December 31, 2021 ($ in 000s) 18,100 (7,600) 10,500 Sales revenue Cost of goods sold Gross profit Operating expenses: (1,440) (940) (1,700) Selling expenses General and administrative expenses Restructuring costs (4,080) 6,420 Total operating expenses Operating income Other income (expense): (300) (360) 2$ Interest expense Loss on sale of investments 200 Interest revenue (460) Other income, net 5,960 Income from continuing operations before income taxes Income tax expense (1,490) 4,470 Income from continuing operations Discontinued operations: 980 Income from operations of discontinued component (245) Income tax expense 735 Income on discontinued operations 5,205 Net income Drev 2 of ? HW 5 (Chapter 4) O (1,440)| (940) (1,700) Selling expenses General and administrative expenses Restructuring costs Total operating expenses (4,080) Operating income 6,420 Other income (expense): (300) (360) Interest expense %24 Loss on sale of investments Interest revenue 200 Other income, net (460) 5,960 (1,490) 4,470 Income from continuing operations before income taxes Income tax expense ces Income from continuing operations Discontinued operations: Income from operations of discontinued component 980 Income tax expense (245) Income on discontinued operations 735 Net income 5,205 Other comprehensive income, net of tax: (300) %24 Foreign currency translation adjustment (300) Comprehensive income 4,905 Earnings per share: Income from continuing operations Income on discontinued operations Net income Required 1 Required 2 ( Prev 2 of 2 Next Required 1 Required 2 Prepare a separate statement of comprehensive income for 2021. (Amounts to be deducted should be indicated with sign. Enter your answers in thousands.) SCHEMBRI MANUFACTURING CORPORATION Statement of Comprehensive Income For the Year Ended December 31, 2021 ($ in 000s) Net income 5,205 Other comprehensive income, net of tax: Foreign currency translation adjustment (300) Total other comprehensive income -300 Comprehensive income 4,905 < Required 1 Required 2 %24 The following income statement items appeared on the adjusted trial balance of Schembri Manufacturing Corporation for the year ended December 31, 2021 ($ in thousands): sales revenue, $18,100; cost of goods sold, $7,600; selling expenses, $1,440; general and administrative expenses, $940; interest revenue, $200; interest expense, $300. Income taxes have not yet been recorded. The company's income tax rate is 25% on all items of income or loss. These revenue and expense items appear in the company's income statement every year. The company's controller, however, has asked for your help in determining the appropriate treatment of the following nonrecurring transactions that also occurred during 2021 ($ in thousands). All transactions are material in amount. 1. Investments were sold during the year at a loss of $360. Schembri also had an unrealized gain of $500 for the year on investments in debt securities that qualify as components of comprehensive income. 2. One of the company's factories was closed during the year. Restructuring costs incurred were $1,700. 3. During the year, Schembri completed the sale of one of its operating divisions that qualifies as a component of the entity according to GAAP. The division had incurred a loss from operations of $700 in 2021 prior to the sale, and its assets were sold at a gain of $1,680. 4. In 2021, the company's accountant discovered that depreciation expense in 2020 for the office building was understated by $340. 5. Negative foreign currency translation adjustment for the year totaled $400. Required: 1. Prepare Schembri's single, continuous multiple-step statement of comprehensive income for 2021, including earnings per share disclosures. One million shares of common stock were outstanding at the beginning of the year and an additional 400,000 shares were issued on July 1, 2021. 2. Prepare a separate statement of comprehensive income for 2021. SCHEMBRI MANUFACTURING CORPORATION Statement of Comprehensive Income For the Year Ended December 31, 2021 ($ in 000s) 18,100 (7,600) 10,500 Sales revenue Cost of goods sold Gross profit Operating expenses: (1,440) (940) (1,700) Selling expenses General and administrative expenses Restructuring costs (4,080) 6,420 Total operating expenses Operating income Other income (expense): (300) (360) 2$ Interest expense Loss on sale of investments 200 Interest revenue (460) Other income, net 5,960 Income from continuing operations before income taxes Income tax expense (1,490) 4,470 Income from continuing operations Discontinued operations: 980 Income from operations of discontinued component (245) Income tax expense 735 Income on discontinued operations 5,205 Net income Drev 2 of ? HW 5 (Chapter 4) O (1,440)| (940) (1,700) Selling expenses General and administrative expenses Restructuring costs Total operating expenses (4,080) Operating income 6,420 Other income (expense): (300) (360) Interest expense %24 Loss on sale of investments Interest revenue 200 Other income, net (460) 5,960 (1,490) 4,470 Income from continuing operations before income taxes Income tax expense ces Income from continuing operations Discontinued operations: Income from operations of discontinued component 980 Income tax expense (245) Income on discontinued operations 735 Net income 5,205 Other comprehensive income, net of tax: (300) %24 Foreign currency translation adjustment (300) Comprehensive income 4,905 Earnings per share: Income from continuing operations Income on discontinued operations Net income Required 1 Required 2 ( Prev 2 of 2 Next Required 1 Required 2 Prepare a separate statement of comprehensive income for 2021. (Amounts to be deducted should be indicated with sign. Enter your answers in thousands.) SCHEMBRI MANUFACTURING CORPORATION Statement of Comprehensive Income For the Year Ended December 31, 2021 ($ in 000s) Net income 5,205 Other comprehensive income, net of tax: Foreign currency translation adjustment (300) Total other comprehensive income -300 Comprehensive income 4,905 < Required 1 Required 2 %24
Expert Answer:
Answer rating: 100% (QA)
1 Sales revenue 18100 less Cost of goods sold 7600 Gross profit 10500 Operating Expenses Selling exp... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-0078025839
9th edition
Authors: J. David Spiceland, James Sepe , Mark Nelson , Wayne Thomas
Posted Date:
Students also viewed these accounting questions
-
The following income statement items appeared on the adjusted trial balance of Schembri Manufacturing Corporation for the year ended December 31, 2011 ($ in 000s): sales revenue, $15,300; cost of...
-
The following income statement items appeared on the adjusted trial balance of Schembri Manufacturing Corporation for the year ended December 31, 2018 ($ in thousands): sales revenue, $15,300; cost...
-
The following income statement items are available from Dansby Inc. for the years ending December 31: Required a. Prepare a comparative, multi-step income statement for Dansby Inc. b. Perform...
-
An air-filled X-band rectangular waveguide has dimensions a = 2.286 cm and b = 1.016 cm. If the waveguide has copper walls ( = o , = o , = 5.8 x 10 7 S/m), find the attenuation in dB/m due to the...
-
Explain why the historical cost and conservatism concepts are important to income statement users.
-
The adjusted trial balance for Motion Auto, Inc., as of June 30, 2018, is presented next: Requirements 1. Prepare the multistep income statement for June for Motion Auto, Inc. 2. Calculate the gross...
-
For each of the following sets of data, (1) calculate the mean of the scores \(\left(\mathrm{X}^{-} ight),(2)\) calculate the deviation of each score from the mean \(\mathrm{X}-\mathrm{X}^{-}\), and...
-
On April 30, 2012, the balances of the accounts appearing in the ledger of Heritage Company are as follows: Instructions 1. Does Heritage Company use a periodic or perpetual inventory system?...
-
A circuit is comprised of a 1 volt DC voltage source, and two 1k resistors in series. The voltage across each resistor is theoretically 0.5 volts. a. If a voltmeter is used with internal resistance...
-
A column fixed at both ends has a minimum radius of gyration r = 29.4 mm, cross-sectional area 3,230 mm, and length 1.94 m. It is made of a material whose compression stress-strain diagram may be...
-
Alta Ski Company's inventory records contained the following information regarding its latest ski model. The company uses a period inventory system. Beginning inventory, January 1, 2021 Purchases:...
-
Which of the following are true about HSA distributions? I. HSA distributions can be used to pay the premiums for qualified long-term care insurance. II. HSA contributions must be made by either the...
-
Which is correct about collectibles? A. Collectible describes a narrow category of asset. B. Uniqueness is not a consideration. C. Collectibles typically rise sharply in value during inflationary...
-
Maria has accumulated $15,000 in savings and wants to buy shares in a hedge fund. Explain why Maria cannot participate in this particular type of mutual fund.
-
Calculate the price of a bond that matures in 8 years, has a face value of $5,000, and has a coupon rate of 2% (paid semiannually) if the market interest rate is 1%. What is the price of the bond if...
-
Regarding contributions to an HSA, which of the following statements is incorrect? A. Contributions can be made by the employer or the individual, or both. B. Contributions made by the employer are...
-
If the following signal m(t) cos (5*10-nt) is applied to DM system with Ts=0.5 msee and step size-0.5 v a) Sketch m(t), m, (t) for one half cycle. (4 points) b) Is there a slope overload noise? (1...
-
What does non-recourse financing mean?
-
The following are partial income statement account balances taken from the December 31, 2018, year-end trial balance of White and Sons, Inc.: restructuring costs, $300,000; interest revenue, $40,000;...
-
Accounting for acquired goodwill has been a controversial issue for many years. In the United States, the amount of acquired goodwill is capitalized and not amortized. Globally, the treatment of...
-
The following is a portion of the condensed income statement for Rowan, Inc., a manufacturer of plastic containers: Required: 1. Determine Rowan's inventory turnover. 2. What information does this...
-
You are setting up a chatbot agency to service marketing, sales and customer services teams. Discuss the advantages and disadvantages of setting up the business as a sole trader or company and the...
-
Principles for Responsible Management Education (PRME) is a not-for-profit entity. It engages business schools to ensure they provide future leaders with the skills needed to balance economic and...
-
Discuss why the cash received from providing a service is revenue, yet the cash contributed by the owner is not revenue.
Study smarter with the SolutionInn App