Presented below is information related to Viel Company on December 31, 2017, the end of its first year of operations.

Sales revenue $310,000

Cost of goods sold 140,000

Selling and administrative expenses 50,000

Gain on sale of plant assets 30,000

Unrealized gain on non-trading equity securities 10,000

Interest expense 6,000

Loss on discontinued operations 12,000

Allocation to non-controlling interest 40,000

Dividends declared and paid 5,000

Instructions

Compute the following: (a) income from operations, (b) net income, (c) net income attributable to Viel Company controlling shareholders, (d) comprehensive income, and (e) retained earnings balance on December 31, 2017. (Ignore income taxes.)

Step by step solution

01

Meaning of Financial Information

In accounting, financial information refers to the economic data of a business entity. A business records its financial information daily in thebooks of accounts, and the same is summarized annually to draft thefinancial reports.

02

Computation of income from operations

Particulars	Amounts ($)
Sales revenue	310,000
Less: Cost of goods sold	(140,000)
Gross profit	170,000
Less: Selling and administration expenses	(50,000)
Income from operations	120,000

03

Computation of net income

Particulars	Amounts ($)
Income from operations	120,000
Other expenses and income
Add: Gain on sale of plant assets	30,000
Total income	150,000
Less: Interest expense	(6,000)
Income from continued operations	144,000
Less: Loss on discontinued operations	(12,000)
Net income	132,000

04

Computation of net income attributable to controlling shareholders

Particulars	Amounts ($)
Net income	132,000
Less: Dividend declared and paid	(5,000)
Attributable net income	127,000

05

Computation of comprehensive income

Particulars	Amounts ($)
Net income	132,000
Add: Unrealized gain on non-trading equity securities	10,000
Comprehensive income	142,000

06

Computation of retained earnings balance

Particulars	Amounts ($)
Net income	132,000
Less: Dividends declared and paid	(5,000)
Retained earnings on December 31, 2017	127,000

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