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Chapter 13: Q5TI (page 695)

Rocky Corporation’s accounting records include the following items, listed in no particular order, at December 31, 2018:

Other Income and (Expenses) \( (6,000) Cost of Goods Sold \) 29,200

Net Sales Revenue 70,800 Operating Expenses 22,000

Gain on Discontinued Operations 4,800

The income tax rate for Rocky Corporation is 30%. Prepare Rocky’s income statement for the year ended December 31, 2018.

Omit earnings per share. Use a multi-step format

Short Answer

Expert verified

Net Income for the year ended December 31, 2018, is $12,880

Step by step solution

01

Basic Introduction-

Income statement is a financial statement that represents financial position of a corporation in the market. It includes all the revenue and expenses of a corporation to determine the net income or net loss earned or incurred by a corporation.

02

Income Statement-

Income Statement

December 31, 2018

Net Sales Revenue

$70,800

Cost of Goods Sold

($29,200)

Gross profit

$41,600

Less: Operating Expenses

($22,000)

Operating Income

$19,600

Other Income and (Expenses)

($6,000)

Income from continuous operations

$13,600

Less: Income tax

($4,080)

Income after Tax

$9,520

Gain on Discontinued Operations

$3,360

Net Income

$12,880

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Most popular questions from this chapter

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Java Company earned net income of \(85,000 during the year ended December 31, 2018. On December 15, Java declared the annual cash dividend on its 4% preferred stock (par value, \)120,000) and a $0.25 per share cash dividend on its common stock (50,000 shares). Java then paid the dividends on January 4, 2019.

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