PART #A The Reidl Corporation has the following information available on Decembe
ID: 2472355 • Letter: P
Question
PART #A
The Reidl Corporation has the following information available on December 31, 2010. The tax rate is 20 percent. There are 50,000 shares of common stock outstanding. Prepare a multistep income statement and calculate the earnings per share for 2010.
Sales $1,950,000
Cost of Goods Sold $1,231,600
Sales Return & Allowances $41,000
Depreciation on Sales Equipment $6,500
Sales Commissions $103,000
Sales Salaries $62,300
Administrative Salaries $98,200
Depreciation on Office Equipment $8,500
Bond Interest Expense $22,000
Selling Expense $168,900
Administrative Expense $134,600
Loss on Disposal of Marine Product Division $80,000
Marine Product Division Operating Income $100,000
Dividend Income $4,000
Entertainment Expense $23,100
Dividends Declared on Preferred Stock $10,000
PART #B
The Reidl Corporation in its first year of operations, reported the following information:
Selling Price per unit
$100
Direct Materials per unit
$5
Direct Labor per unit
$1
Unit-related Overhead per unit
$6
Selling Cost per unit
$2
Batch-related Overhead for the year
$500,000
Facility-sustaining Overhead for the year
$800,000
Fixed Administrative Cost for the year
$650,000
Units Produced
20,000
Units Sold
15,000
a) Prepare an income statement using absorption costing.
b) Prepare an income statement using the variable costing method.
c) Prepare an income statement using the throughput costing method.
Explain each step.
Selling Price per unit
$100
Direct Materials per unit
$5
Direct Labor per unit
$1
Unit-related Overhead per unit
$6
Selling Cost per unit
$2
Batch-related Overhead for the year
$500,000
Facility-sustaining Overhead for the year
$800,000
Fixed Administrative Cost for the year
$650,000
Units Produced
20,000
Units Sold
15,000
Explanation / Answer
PART #A
multistep income statement Sales 1950000 Sales Return & Allowances 41000 1909000 Cost of Goods Sold 1231600 Gross Profit 677400 Depreciation on Sales Equipment 6500 Sales Salaries 62300 Sales Commissions 103000 Administrative Salaries 98200 Bond Interest Expense 22000 Selling Expense 168900 Administrative Expense 134600 Entertainment Expense 23100 618600 Income from operations 58800 Other revenues and gains Dividend Income 4000 Income from continuing operations before income tax 62800 Income tax 20% 12560 Income from continuing operations 50240 Discontinued operations Profit on operations, net of applicable tax 100000 Loss on disposal, net of applicable tax -80000 180000 Net income 230240Related Questions
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