Security-Rand Corporation determines executive incentive compensation at the end of its fiscal year. At the end of the first quarter, management estimated that the amount will be $348 million. Depreciation expense for the year is expected to be $108 million. Also during the quarter, the company realized a gain of $35 million from selling two of its manufacturing plants.
Required: What amounts for these items should be reported in the first quarter's income statement? (Enter your answers in millions.)
Homework Answers
Solution:
Amount for these items should be reported in first quarter income statement:
Incentive compensation = $348/4 = $87 million
Depreciation expense = $108 / 4 = $27 million
Gain on sale = $35 million
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