At December 31,2007, the general ledger of Hoffman Electric had the followingacc
ID: 2433570 • Letter: A
Question
At December 31,2007, the general ledger of Hoffman Electric had the followingaccount balances.
All adjustingentries (except for income taxes at 35%) have been made. Thecompany
had 10,400 sharesof common stock outstanding during theyear.
Accounts payable $8,950 Equipment $ 80,300
Accounts receivable14,970 Gain on sale of land 4,800
Accrued liabilities21,000 Interest expense 1,420
Accumulated depreciation15,300 Merchandise18,465
Advertising expense9,968 Land 30,000
Cash9,530 Retained earnings* 57,984
Common stock36,000 Sales revenue 260,772
Cost of goods sold102,690 Utilities expense 9,002
Depreciation expense13,510 Wages expense 59,780
*Balance at January 1,2007
Prepare an income statement in goodform
Explanation / Answer
Hoffman Electric Income Statement Year Ending December 31, 2007Year Ending December 31, 2007
Sales revenue $260,772 Cost of goods sold $102,690 Gross Profit $158,082 Selling, general and administrativeexpenses* $92,260 Operating Income $65,822 Other Income (expense) Interest expense ($1,420) Gain on sale of land $4,800 Earnings befor income taxes $69,202 Income taxes $24,221 Netearnings $44,981 Earnings pershare (10,400 shares) $4.33 * $9,968 + $13,510 + $9,002 +$59,780 Sales revenue $260,772 Cost of goods sold $102,690 Gross Profit $158,082 Selling, general and administrativeexpenses* $92,260 Operating Income $65,822 Other Income (expense) Interest expense ($1,420) Gain on sale of land $4,800 Earnings befor income taxes $69,202 Income taxes $24,221 Netearnings $44,981 Earnings pershare (10,400 shares) $4.33
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