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Question 4 View Policies Current Attempt in Progress The following balances were taken from the books of Skysong Corp. on December 31, 2020. Interest revenue $87,250 52,250 Cash Sales revenue 1,381,250 Accounts receivable 151,250 Prepaid insurance 21,250 Accumulated depreciation-equipment $41,250 Accumulated depreciation-buildings 29,250 Notes receivable 156,250 Selling expenses 195,250 Accounts payable 171,250 Bonds payable 101,250 Administrative and general expenses 98,250 Accrued liabilities 33,250 Interest expense 61,250 Notes payable 101,250 Sales returns and allowances 151,250 8.250 Allowance for doubtful accounts Sales discounts 46,250 Land 101,250 201,250 Equipment Buildings Loss from earthquake damage 141,250 622,250 151,250 501,250 Cost of goods sold Common stock Retained earnings 22,250 Assume the total effective tax rate on all items is 20%.

Answer 1

SKYSONG CORP.
Income statement
for the year ended December 31,2020
Sales revenue :
sales revenue		$ 1,381,250
less:
sales return and allowances	$ 151,250
sales discounts	$ 46,250
		($197,500)
net sales		$ 1,183,750
less: cost of goods sold		($ 622,250)
gross profit on sales		$ 561,500
operating expenses :
selling expenses	$ 195,250
administrative and general expenses	$ 98,250
		($293,500)
income from operations		$ 268,000
other revenues and gains :
interest revenue		$ 87,250
other expenses and losses :
interest expense		($ 61,250)
income before income tax and extraordinary item		$ 294,000
income tax ( $299,000* 20 % )		($ 59,800)
income before extraordinary item		$ 234,200
extraordinary item -loss from earthquake damage	$ 151,250
less: applicable income tax reduction ($ 151,250*20%)	($30,250)
		($121,000)
net income		$ 113,200
per share of common stock :
income before extraordinary item { $ 234,200 / 100,000 shares }		$ 2.34
extraordinary item (net of tax ) { 121,000 / 100,000 shares }		($ 1.21 )
net income {$ 113,200 / 100,000 shares }		$ 1.13