Question

Presented below is information related to Splish Company at December 31, 2020, the end of its first year of operations.

Sales revenue $334910
Cost of goods sold 149030
Selling and administrative expenses 54000
Gain on sale of plant assets 32710
Unrealized gain on available-for-sale debt investments 9080
Interest expense 6360
Loss on discontinued operations 11260
Dividends declared and paid 4660
Compute the following:
(a) Income from operations -
(b) Net income -
(c) Comprehensive income
(d) Retained earnings balance at December 31, 2020 -

Answer 1

Answer and Explanation:

The computation is shown below:

a.

Sales Revenue $334,910

Less: expenses

Cost of goods sold $149,030

Selling and administrative expenses $54,000

Income from Operations $131,880

b.

Income from Operations $131,880

Add: Gain on sale of Plant assets $32,710

Less:

Interest expenses $6,360

Loss on discontinued operations $11,260

Net income $146,970

c.

Net income $146,970

Add: Unrealized Gain $9,080

Comprehensive Income $156,050

d.

Retained earnings

Net income $146,970

Less: Dividend declared and paid $4,660

Retained earnings $142,310