Brief Exercise 4-2

Brief Exercise 4-2

Blossom Corporation had net sales of $2,413,600 and interest revenue of $37,500 during 2017. Expenses for 2017 were cost of goods sold $1,469,200, administrative expenses $221,600, selling expenses $294,200, and interest expense $54,800. Blossom’s tax rate is 30%. The corporation had 107,700 shares of common stock authorized and 74,650 shares issued and outstanding during 2017. Prepare a single-step income statement for the year ended December 31, 2017. (Round earnings per share to 2 decimal places, e.g. 1.48.)

BLOSSOM CORPORATION Income Statement

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Brief Exercise 4-3

Whispering Corporation had net sales of $2,417,500 and interest revenue of $39,900 during 2017. Expenses for 2017 were cost of goods sold $1,462,200, administrative expenses $221,900, selling expenses $295,900, and interest expense $49,500. Whispering’s tax rate is 30%. The corporation had 104,500 shares of common stock authorized and 70,380 shares issued and outstanding during 2017. Prepare a condensed multiple-step income statement for Whispering Corporation. (Round earnings per share to 2 decimal places, e.g. 1.48.)

WHISPERING CORPORATION Income Statement

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Brief Exercise 4-10

Concord Corporation has retained earnings of $715,500 at January 1, 2017. Net income during 2017 was $1,435,900, and cash dividends declared and paid during 2017 totaled $79,600. Prepare a retained earnings statement for the year ended December 31, 2017. Assume an error was discovered: land costing $88,040 (net of tax) was charged to maintenance and repairs expense in 2014. (List items that increase retained earnings first.)

CONCORD CORPORATION Retained Earnings Statement

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:

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Exercise 4-5 (Part Level Submission)

Two accountants for the firm of Elwes and Wright are arguing about the merits of presenting an income statement in a multiple-step versus a single-step format. The discussion involves the following 2017 information related to Splish Company ($000 omitted).

Administrative expense
    Officers’ salaries $4,972
    Depreciation of office furniture and equipment 4,032
Cost of goods sold 60,642
Rent revenue 17,302
Selling expense
    Delivery expense 2,762
    Sales commissions 8,052
    Depreciation of sales equipment 6,552
Sales revenue 96,572
Income tax 9,142
Interest expense 1,932

Common shares outstanding for 2017 total 40,550 (000 omitted).

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(a)

Prepare an income statement for the year 2017 using the multiple-step form. (Round earnings per share to 2 decimal places, e.g. 1.48.)

SPLISH COMPANY Income Statement

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(In thousands, except earnings per share)

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Exercise 18-3

On May 1, 2017, Crane Inc. entered into a contract to deliver one of its specialty mowers to Kickapoo Landscaping Co. The contract requires Kickapoo to pay the contract price of $874 in advance on May 15, 2017. Kickapoo pays Crane on May 15, 2017, and Crane delivers the mower (with cost of $534) on May 31, 2017. (a) Prepare the journal entry on May 1, 2017, for Crane. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select “No entry” for the account titles and enter 0 for the amounts.)

Date Account Titles and Explanation Debit Credit
May 1, 2017 https://edugen.wileyplus.com/edugen/art2/common/pixel.gif https://edugen.wileyplus.com/edugen/art2/common/pixel.gif https://edugen.wileyplus.com/edugen/art2/common/pixel.gif
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(b) Prepare the journal entry on May 15, 2017, for Crane. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select “No entry” for the account titles and enter 0 for the amounts.)

Date Account Titles and Explanation Debit Credit
May 15, 2017 https://edugen.wileyplus.com/edugen/art2/common/pixel.gif https://edugen.wileyplus.com/edugen/art2/common/pixel.gif https://edugen.wileyplus.com/edugen/art2/common/pixel.gif
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(c) Prepare the journal entry on May 31, 2017, for Crane. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select “No entry” for the account titles and enter 0 for the amounts.)

Date Account Titles and Explanation Debit Credit
May 31, 2017 https://edugen.wileyplus.com/edugen/art2/common/pixel.gif https://edugen.wileyplus.com/edugen/art2/common/pixel.gif https://edugen.wileyplus.com/edugen/art2/common/pixel.gif
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(To record sales)
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(To record cost of goods sold)

Exercise 18-7 (Part Level Submission)

Pronghorn Biotech enters into a licensing agreement with Pang Pharmaceutical for a drug under development. Pronghorn will receive a payment of $12,600,000 if the drug receives regulatory approval. Based on prior experience in the drug-approval process, Pronghorn determines it is 75% likely that the drug will gain approval and a 25% chance of denial.

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(a)

Determine the transaction price of the arrangement for Pronghorn Biotech.

Transaction price $

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Exercise 18-12

Carla Company sells goods that cost $308,000 to Ricard Company for $400,000 on January 2, 2017. The sales price includes an installation fee, which has a standalone selling price of $38,000. The standalone selling price of the goods is $362,000. The installation is considered a separate performance obligation and is expected to take 6 months to complete. (a) Prepare the journal entry (if any) to record the sale on January 2, 2017. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select “No entry” for the account titles and enter 0 for the amounts.)

Date Account Titles and Explanation Debit Credit
Jan. 2, 2017 https://edugen.wileyplus.com/edugen/art2/common/pixel.gif https://edugen.wileyplus.com/edugen/art2/common/pixel.gif https://edugen.wileyplus.com/edugen/art2/common/pixel.gif
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(b) Carla prepares an income statement for the first quarter of 2017, ending on March 31, 2017 (installation was completed on June 18, 2017). How much revenue should Carla recognize related to its sale to Ricard?

First Quarter
Sales Revenue $

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Cost of Goods Sold https://edugen.wileyplus.com/edugen/art2/common/pixel.gif
Gross Profit $

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