Prepare an income statement and balance sheet from transaction data
a. Based on your answers to Problem 4.21, prepare an income statement (ignoring income taxes) for Kissick Co.'s first year of operations and a balance sheet as of the end of the year. (Hint: You may find it helpful to prepare T-accounts for each account affected by the transactions.)
b. Provide a brief written evaluation of Kissick Co.'s results from operations for the year and its financial position at the end of the year. In your opinion, what are the likely explanations for the company's net loss?
Calculate income from operations and net income Selected information taken from the financial statements of Verbeke Co. for the year ended December 31, 2013, follows:
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Gross profit
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$412,000
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|
General and administrative expenses
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83,000
|
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Net cash used by investing activities
|
106,000
|
|
Dividends paid
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51,000
|
|
Interest expense
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61,000
|
|
Net sales
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741,000
|
|
Advertising expense
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76,000
|
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Accounts payable
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101,000
|
|
Income tax expense
|
38,000
|
|
Other selling expenses
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42,000
|
a. Calculate income from operations (operating income) for the year ended December 31, 2013. (Hint: You may wish to review Exhibit 2-2.)
b. Calculate net income for the year ended December 31, 2013.