Exercise 4-8 Presented below are selected ledger accounts of Sunland Corporation

Question

Exercise 4-8 Presented below are selected ledger accounts of Sunland Corporation as of December 31, 2017. Cash Administrative expenses Selling expenses Net sales Cost of goods sold Cash dividends declared (2017) Cash dividends paid (2017) Discontinued operations (loss before income taxes) Depreciation expense, not recorded in 2016 Retained earnings, December 31, 2016 Effective tax rate 30% $51,400 107,500 80,940 557,500 268,200 24,650 23,600 40,700 31,400 91,420 Compute net income for 2017. Net income LINK TO TEXT LINK TO TEXT Prepare a partial income statement beginning with income from continuing operations before income Assume 19.220 shares of common stock were outstanding during 2017. (Round earn ings per share to 2 de

Explanation / Answer

a. Net Income = 42,112

b.

SUNLAND CORPORATION

Income Statement

For the year ended December 31, 2017

Income from continuing operations before Tax = Net Sales - COGS - Selling Expenses - Administrative Expens    = $557,500 - $268,200 - $80,940 - $107,500 = $100,860

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Income from continuing operations before Tax 100,860 Income Tax 30,258 Income from continuing operations after Tax 70,602 Discontinued Operations, less applicable income tax 28,490 Net Income 42,112 Earnings per share : Income from continuing operations 3.67 Loss on discontinued operations, net of tax (1.48) Net Income 2.19

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