1. For the year ending December 31, 2014, Soto Inc. reports net income $142,790
ID: 2485323 • Letter: 1
Question
1. For the year ending December 31, 2014, Soto Inc. reports net income $142,790 and dividends $80,290.
Prepare the retained earnings statement for the year assuming the balance in retained earnings on January 1, 2014, was $216,070.
2. The following information is available for Reinsch Corporation for the year ended December 31, 2014: cost of goods sold $207,500, sales revenue $435,800, other revenues and gains $48,500, and operating expenses $75,700.
Assuming a corporate tax rate of 30%. prepare an income statement for the company.
3.
Knudsen Corporation was organized on January 1, 2013. During its first year, the corporation issued 2,000 shares of $50 par value preferred stock and 109,200 shares of $10 par value common stock. At December 31, the company declared the following cash dividends: 2013, $7,000; 2014, $14,400; and 2015, 27,200
Show the allocation of dividends to each class of stock, assuming the preferred stock dividend is 7% and noncumulative.
Knudsen Corporation was organized on January 1, 2013. During its first year, the corporation issued 2,000 shares of $50 par value preferred stock and 109,200 shares of $10 par value common stock. At December 31, the company declared the following cash dividends: 2013, $7,000; 2014, $14,400; and 2015, 27,200
Show the allocation of dividends to each class of stock, assuming the preferred stock dividend is 7% and noncumulative.
Explanation / Answer
1. Retained earnings statement :
Opening balance as on Jan 1, 2014 = $216070
Add: Earning during the year = $142790
Less: Dividend paid during the year = ($80290)
Closing balance as on Dec 31, 2014 = $278570
2. Income Statement
Sales Revenue = $435800
Less: COGS = ($207500)
Less : ops Exp = ($75700)
Net income from Operations = $151800
Add: Other Income and gains = $48500
Total income = $ 200300
Less Taxes @ 30% ($60090)
Net income after Tax = $140210
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