Presented below is information related to Sunland Company at December 31, 2017, the end of its first year of operations.
Sales revenue $327,980
Cost of goods sold 148,580
Selling and administrative expenses 52,100
Gain on sale of plant assets 30,840
Unrealized gain on available-for-sale investments 9,370
Interest expense 6,060
Loss on discontinued operations 11,970
Dividends declared and paid 5,190
Compute the following:
(a) Income from operations $
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(b) Net income $
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(c) Comprehensive income $
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(d) Retained earnings balance at December 31, 2017 $
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Zviko Zviko · Answer 1 · 2021-02-06T01:42:43+01:00

Answer:

Part a

Income from operations calculation

Sales revenue $327,980

Less Cost of goods sold ($148,580)

Gross Profit $179,400

Less Operating Expenses

Selling and administrative expenses ($52,100)

Income from operations $127,300

Part b

Net Income calculation

Income from operations $127,300

Non-Operating items

Gain on sale of plant assets $30,840

Unrealized gain on available-for-sale investments $9,370

Interest expense ($6,060) $34,150

Net Income $161,450

Part c

Comprehensive income calculation

Net Income (from continuing activities) $161,450

Less Loss on discontinued operations ($11,970)

Comprehensive income $149,480

Part d

Comprehensive income $149,480

Less Dividends declared and paid ($5,190)

Retained Earnings $144,290

Explanation:

Income from Operations = Sales less Operating Expenses

Net Income = Income from Operations add or less Non Operating items

Comprehensive Income = Income from Continuing Activities + Income from discontinued Activities

Retained Income = Comprehensive Income less Dividends declared and paid.