Problem:
The trial balance of Lakewood Inc. included the following accounts as of December 31, 2006:
Debits Credits
Sales revenue 1,800,000
Interest revenue 80,000
Gain on sale of land (infrequent but not unusual item) 50,000
Loss on expropriated foreign assets (event
is unusual and infrequent) 300,000
Cost of goods sold 1,100,000
Salaries and wages expense 220,000
Write-off of obsolete equipment 30,000
Depreciation expense 150,000
Interest expense 40,000
Marketing and administrative expenses 50,000
Lakewood Inc. had 100,000 shares of stock outstanding throughout the year. Lakewood Inc. is subject to a 30% tax rate.
Calculate the following and show the computations.
a. Gross profit
b. Operating income
c. Income before income taxes and extraordinary item
d. Net income
e. Earnings per share disclosures on the income statement