Presented below is information related to Viel Company at December 31, 2014, the

Question

Presented below is information related to Viel Company at December 31, 2014, the end of its first year of operations. Sales revenue $313,740 Cost of goods sold 138,860 Selling and administrative expenses 52,340 Gain on sale of plant assets 34,390 Unrealized gain on available-for-sale investments 11,410 Interest expense 5,700 Loss on discontinued operations 11,270 Allocation to noncontrolling interest 38,910 Dividends declared and paid 4,690 Compute the following: (a) Income from operations $ (b) Net income $ (c) Net income attributable to Viel Company’s controlling shareholders $ (d) Comprehensive income $ (e) Retained earnings balance at December 31, 2014 $

Explanation / Answer

Viel Company Year ended December 31 2014 (a) Income from Operations = Sales - Cost of Goods Sold - Selling and Administrative Expenses - Interest Expenses Hence, Income from Operations = $ 313,740 - $ 138,860 - $ 52,340 - $ 5,700 = $ 116,840 (b) Net Income = Income from Operations + Extraordinary Items Hence, Net Income = $ 116,840 + $ 11,410 + $ 34,390 = $ 162,640 (c) Net Income attributable to Viel Company's controlling shareholders = Net Income as given above - Allocation to Non-controlling Interest Hence, Net Income attributable to Viel Company's controlling shareholders = $ 162,640 - $ 38,910 = $ 123,730 (d) Comprehensive Income = Net Income as above in (c) less Loss from Discontinued Operations Hence, Comprehensive Income = $ 123,730 - $ 11,270 = $ 112,460 (e) Retained Earnings Balance = Comprehensive Income in (d) above less Dividends declared and paid Hence, Retained Earnings Balance = $ 112,460 - $ 4,690 = $ 107,770

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