Answered

Presented below are selected ledger accounts of Whispering Corporation as of December 31, 2020.

Cash $65,000
Administrative expenses 130,000
Selling expenses 104,000
Net sales 702,000
Cost of goods sold 273,000
Cash dividends declared (2020) 26,000
Cash dividends paid (2020) 19,500
Discontinued operations (loss before income taxes) 52,000
Depreciation expense, not recorded in 2019 39,000
Retained earnings, December 31, 2019 117,000

Effective tax rate 20%

Required:
a. Compute net income for 2020.
b. Prepare a partial income statement beginning with income from continuing operations before income tax, and including appropriate earnings per share information.

Answer :

Zviko

Answer:

Part a

Whispering Corporation

Income Statement for the year ended December 31, 2020.

Net Sales                                    702,000

Less Cost of Sales                    (273,000)

Gross Profit                                429,000

Less Expenses

Administrative expenses           (130,000)

Selling expenses                       (104,000)

Depreciation expense               (39,000)

Net Income                                 195,000

Part b

Whispering Corporation

Partial income statement for the year ended December 31, 2020.

Continuing Activities                                                       195,000

Less Discontinued operations (                                     52,000

Total Comprehensive income                                       143,000

Explanation:

Income Statement only includes incomes and expenses.

Earnings per share is what shareholders expect to receive per share out of profits earned.

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