12.Hubbell Service showed the following information for 2010: Net sales revenue, $410,000; interest revenue, $11,000; cost of goods sold, $220,000; operating expense, $15,000, extraordinary gain on retirement of debt, $30,000; and dividends declared, $14,000. Calculate operating income for 2010.
13.The following are some accounts for MarvellCorp. for 2009:
Sales revenue
$102,000
Cost of goods sold
85,000
Administrative expense
34,000
Interest expense
3,000
Loss from disposal of segment
21,000
Gain from sale of land
4,000
Stock dividends declared
9,000
Loss due to permanent value decline of plant asset
6,000
Extraordinary loss from hurricane
19,000
Unrealized gain from trading securities
5,000
Interest revenue
1,000
All amounts are before income taxes. Marvell has a 30% tax rate. Determine the amount of Marvell’ ‘other revenue’ and ‘other expenses’ for 2009. List all non-income statement items and indicate on which financial statement they are reported.
14.Hilton Corporation’s income statement for the year ending December 31, 2009, appears below.
Net sales
$810,000
Cost of goods sold
(610,000)
Gross profit
200,000
Selling and administrative expenses
(90,000)
Net operating income
110,000
Gain on sale of securities
56,000
Interest expense
(3,000)
Income from continuing operations before tax
163,000
Income tax expense
(48,900)
Income from continuing operations
114,100
Extraordinary gain (net of tax)
22,000
Income before cumulative effect
136,100
Income effect due to change in accounting principle
32,000
Net income
$168,100
Compute the maximum amount of dividends Hilton can pay if it has a debt covenant expressed as 20percent of net income, and as 20 percent of net operating income. Which amount would a creditor more likely use as the restriction on dividends? Explain.
15.Jarvis Company provided the following information for the year ending December 31, 2009:
Cost of goods sold
$400,000
Gain on sale of business segment
20,000
Income tax rate
30%
Interest income
5,000
Interest expense
7,000
Loss from operation of discontinued business segment
12,000
Operating expenses
23,000
Revenue from sales
730,000
Number of shares of common stock outstanding
100,000
Prepare an income statement in good form. You may omit the heading. Include all earnings per share amounts required for the year ending December 31, 2009.
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