Question

The following is a partial year-end adjusted trial balance. Debits Credits $300,000 $ 22,000 4,000 Account Title Sales revenue Loss on sale of investments Interest revenue Cost of goods sold General and administrative expense Restructuring costs Selling expense Income tax expense 160,000 40,000 50,000 25,000 ? Income tax expense has not yet been recorded. The income tax rate is 25%. a. Determine the operating income (loss). b. Determine the income (loss) before income taxes. c. Determine the net income (loss). Answer is complete but not entirely correct. a. S b. Operating income (loss) Income (loss) before income taxes Net income (loss) $ 25,000 7,000 1,750 C. $

Answer 1

Solution:

a.	Opeating Income/ loss	25,000
b	Income/loss before income taxes	7,000
c	Net income(loss)	5,250

Explanation:

a.	Sales revenue	3,00,000
	Less: Cost of goods sold	-1,60,000
	General and administrative expenses	-40,000
	Restructuring costs	-50,000
	Selling expenses	-25,000
	Operating Income	25,000

b.	Operating income	25,000
	Add: Interest revenue	4,000
	Deduct: Loss on sale of investments	-22,000
	Income before income taxes	7,000

c.	Income before income taxes	7,000
	Income tax expense	1750
	Net Income	5,250

Copy of HomeworkLib2 - Microsoft Excel (Product Activation Failed) X File Home Insert Page Layout Formulas Data Review View X % Cut AutoSum Calibri 11 A A z Wrap Text General Normal Bad Good La Copy Fill- Paste B 1 U- *Merge & Center Calculation Conditional Format as Neutral Formatting Table Check Cell Insert Delete Format Format Painter Clear Sort & Find & Filter - Select Editing Clipboard Font Alignment Number Styles Cells J143 A B C D E F G H 1 J K L M N 0 134 a. 135 136 137 b Opeating Income/ loss Income/loss before income taxes Net income(loss) 25,000 7,000 5,250 С Account Title Sales revenue Loss on sale of investments Interest revenue Cost of goods sold General and administrative expense Restructuring costs Selling expense Income tax expense Income tax rate Debits Credit 3,00,000 22,000 4,000 1,60,000 40,000 50,000 25,000 0 25% a. Sales revenue 3,00,000 Less: Cost of goods sold -1,60,000 General and administrative expenses -40,000 Restructuring costs -50,000 Selling expenses -25,000 Operating Income 25,000 C b. Operating income Add: Interest revenue Deduct: Loss on sale of investments Income before income taxes 138 139 140 141 142 143 144 145 146 147 148 149 150 151 152 153 154 155 156 157 158 159 160 161 162 163 164 165 25,000 4,000 -22,000 7,000 C. Income before income taxes Income tax expense Net Income 7,000 1750 5,250 Sheet157 Sheet158 Sheet159 Sheet160 Sheet161 Sheet162 Sheet163 Sheet164 Sheet165 Sheet166 Sheet167 Ready O 100% 1 Type here to search O חד 29% O » ENG 03:46 20-09-2020

Copy of HomeworkLib2 - Microsoft Excel (Product Activation Failed) X File Home Insert Page Layout Formulas Data Review View X ! % Cut AutoSum Calibri 11 A A z Wrap Text General Normal Bad Good Ea Copy Fill Paste B 1 U- A, *Merge & Center Calculation Conditional Format as Neutral Formatting Table Check Cell Insert Delete Format Format Painter Clear Sort & Find & Filter - Select Editing Clipboard Font Alignment Number Styles Cells 1143 fac A B с D E F G. H I 134 a. b Debits Credit 300000 22000 4000 160000 Opeating Income/ loss Income/loss before income taxes Net income(loss) =H146 =H151 =H155 Ic с Account Title Sales revenue Loss on sale of investments Interest revenue Cost of goods sold General and administrative expense Restructuring costs Selling expense Income tax expense Income tax rate 40000 50000 a. =D136 25000 0 Sales revenue Less: Cost of goods sold General and administrative expenses Restructuring costs Selling expenses Operating Income 0.25 =-C139 =-C140 =-C141 =-C142 =SUM(H141:H145) b. 135 136 137 138 139 140 141 142 143 144 145 146 147 148 149 150 151 152 153 154 155 156 157 158 159 160 161 162 163 164 165 Operating income Add: Interest revenue Deduct: Loss on sale of investments Income before income taxes =H146 =D138 --C137 =SUM(H148:H150) C. Income before income taxes Income tax expense Net Income =H151 =H153*C144 =H153-H154 Sheet157 Sheet158 Sheet159 Sheet160 Sheet161 Sheet162 Sheet163 Sheet164 Sheet165 Sheet166 Sheet167 Ready OH 100% 0 1 Type here to search O חד 29% D (») ENG 03:47 20-09-2020