Exercise 4-7 (Part Level Submission) (a) LATIFA SHOE CO. Income Statement For th

ID: 2420422 • Letter: E

Question

Exercise 4-7 (Part Level Submission)

(a)

LATIFA SHOE CO.
Income Statement
For the Year Ended December 31, 2014

Exercise 4-7 (Part Level Submission)

The accountant of Latifa Shoe Co. has compiled the following information from the company’s records as a basis for an income statement for the year ended December 31, 2014.
Rent revenue $30,400 Interest expense 19,400 Market appreciation on land above cost 32,400 Salaries and wages expense (selling) 116,200 Supplies expense (selling) 19,000 Income tax 38,800 Salaries and wages expense (administrative) 137,300 Other administrative expenses 53,100 Cost of goods sold 497,400 Net sales 981,400 Depreciation on plant assets (70% selling, 30% administrative) 66,400 Cash dividends declared 17,400
There were 19,300 shares of common stock outstanding during the year.

Explanation / Answer

Net sales $981,400

less:cost of goods sold 497,400

Gross profit $484,000

Less:Operating expense

Selling expense :

Salaries and wages expense $116,200

Supplies expense 19,000

Depreciation (66,400@70%) 46,480 $(181,680)

Administrative expense

Salaries and wages expense 137,300

Depreciation 19,920

Other administrative expense 53,100 (210,300)

Income from operations $92,000

Other Revenue and gains

Rental revenue $30,400

Dividend income 17,400

Market appreciation 32,400 $80,200

$172,200

Other expenses and losses

Interest expense 19,400

Income before income tax $152,800

Income tax 38,800

Net income for the year $114,000

Earning per share 114,000/19,300 $5.91 per share