The financial records of LeRoi Jones Inc. were destroyed by fire at the end of 2

Question

The financial records of LeRoi Jones Inc. were destroyed by fire at the end of 2014. Fortunately, the controller had kept certain statistical data related to the income statement as follows.

1. The beginning merchandise inventory was $97,300 and decreased 20% during the current year. 2. Sales discounts amount to $22,500. 3. 30,800 shares of common stock were outstanding for the entire year. 4. Interest expense was $24,400. 5. The income tax rate is 30%. 6. Cost of goods sold amounts to $527,000. 7. Administrative expenses are 17% of cost of goods sold but only 8% of gross sales. 8. Four-fifths of the operating expenses relate to sales activities.

Explanation / Answer

Revenues & Gains :

Sales Revenues $11,19,875

($89590 x 100/8)

Expenses&Losses :

Cost of Goods Sold $5,27,000

Administrative expenses $89,590

($527000 x 17%)

Interest Expense $24,400

Sales Discount $22,500

-------------------------------------

Gross income $4,56,385

INCOME TAX (30%) $1,36,916

-------------------------------------

Net income $3,19,469

Earnings per share $10.37

($3,19,469/30800)

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.