question archive From the following information for the year 2019, prepare an income statement and a statement of shareholders' equity, under GAAP rules, for a company with shareholders equity at the beginning of 2019 of £3,270 million
From the following information for the year 2019, prepare an income statement and a statement of shareholders' equity, under GAAP rules, for a company with shareholders equity at the beginning of 2019 of £3,270 million
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From the following information for the year 2019, prepare an income statement and a statement of shareholders' equity, under GAAP rules, for a company with shareholders equity at the beginning of 2019 of £3,270 million. Amounts are in millions. Sales £4,458 Common dividends paid £140 Selling expenses £1,230 Research and development costs £450 Cost of goods sold £3,348 Share issues £680 Unrealized gain on securities available for sale £76 Income taxes (£200) Also calculate comprehensive income and net payout. Income taxes are negative. How can this be? IE
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| Income Statement | ||
| For the Year ended 2019 | ||
| Sales | 4458 | |
| Cost of goods sold | -3348 | |
| Gross profit | 1110 | |
| Less: Operating expenses: | ||
| Selling expenses | 1230 | |
| Research & development costs | 450 | -1680 |
| Taxable income/(loss) | -570 | |
| Income taxes | -200 | |
| Net income /(loss) | -770 | |
| Statement of Comprehensive Income | ||
| Unrealised gain on securities available for sale | 76 | |
| Ending balance of OCI | 76 | |
| Net pay-out= | 140 | |
| Statement of Retained Earnings | ||
| Net income /(loss) | -770 | |
| Common dividends paid | -140 | |
| Ending Retained earnings | -910 | |
| Statement of Shareholders' Equity | ||
| Beginning balance of SH. Equity | 3270 | |
| Share issues | 680 | |
| Retained Earnings | -910 | |
| Other comprehensive Income | 76 | |
| Ending balance of SH. Equity | 3116 |
| Negative income taxes are possible , |
| 1. when refunds due from the past are applied , to the current year's taxable income |
| 2. Or as , in the above income statement, when there is a net loss as a result of which taxes are saved , when previous taxes due are carried forward--- ie. Income taxes due for the past years, are adjusted against this tax loss-year, to the extent of net loss * applicable Tax % for that year----under the carryforwrad provsions of the income-tax laws. |
