Question

A company's activities for Year 2 included the following:

Unrealized gain on available for sale debt securities	9,600
Cost of goods sold	1,400,000
Prior service cost adjustment for defined benefit pension plan	195,000
Selling and administrative expense	600,000
Gain on sale of available for sale securities	16,000
Gain on disposal of a discontinued business segment	26,000
Sales returns	106,000
Gross sales	7,300,000

The company has a 30% effective income tax rate.

What is the company's net income for Year 2?

• A.

  $3,535,420

• B.

  $3,808,420

• C.

  $3,647,000

• D.

  $3,665,200

• Mountain View's activities for the year included the following:

  Gross Sales	1,500,000
  Cost of goods sold	360,000
  Selling and administrative expenses	120,000
  Unrealized loss on derivative hedging transaction	10,000
  Allowance for doubtful accounts	17,000
  Prepaid insurance expense	37,000
  Foreign currency translation gain	96,000
  Loss on sale of equity securities	55,000
  Unrealized loss on equity securities	38,000

  The company has a 30% effective income tax rate.

  What is the company's net income for the year?

• A.

  $647,500

• B.

  $648,900

• C.

  $620,900

• D.

  $681,100

Answer 1

A. $ 3535,420 Gross Salu less: Cost less: Solling 7,300.00 less: Sale returns $ 106,000 Net Sales $7,194,000 of goods sold $1,400,000 $5,794,000 and administrative $600,000 Expense prior sewice cost adjustment $195,000 for defined benifit pension plan. $4,999,000 Add: Gain on sale of available $ 16,000 for sale securities Garn on disposal of a discontinued 26.000 business segment Unrealised goin on available for $9,600 sale debt securities Net profit before income tax $5,050,600 less: Income Tax @ 30-1 $1515120 $ 35,35,420 2020/09/15 09:59