Ask Question
23 September, 15:31

nted below is information related to Viel Company at December 31, 2020, 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 available-for-sale debt investments 10,000 Interest expense 6,000 Loss on discontinued operations 12,000 Dividends declared and paid 5,000 Instructions Compute the following: (a) income from operations, (b) net income, (c) comprehensive income, and (d) retained earnings balance at December 31, 2020. (Ignore income tax effects.)

+5
Answers (1)
  1. 23 September, 15:49
    0
    Viel Company

    (a) Income from operations:

    Sales revenue $310,000

    Cost of goods sold 140,000

    Selling & admin. expenses 50,000

    Income from operations $120,000

    (b) Net income:

    Sales revenue $310,000

    Cost of goods sold - 140,000

    Selling & admin. expenses - 50,000

    Income from operations $120,000

    Gain on sales of plant assets 30,000

    Interest Expense - 6,000

    Loss on discontinued operations - 12,000

    Net Income $132,000

    (c) Comprehensive Income

    Sales revenue $310,000

    Cost of goods sold - 140,000

    Selling & admin. expenses - 50,000

    Income from operations $120,000

    Gain on sales of plant assets 30,000

    Interest Expense - 6,000

    Loss on discontinued operations - 12,000

    Net Income $132,000

    Unrealized Gain on Investments - 10,000

    Comprehensive Income $122,000

    (d) Retained Earnings balance at December 31, 2020:

    Comprehensive Income $122,000

    less Dividends 5,000

    Retained Earnings Balance $117,000

    Explanation:

    a) Income from operations is the income generated from running the primary business and excludes income from other sources. For example, gains or losses from asset disposal and discontinued operations, and interest expense.

    b) Net Income is the income from operations, including other sources of income, after adding or deducting non-operating gains or losses and interests.

    c) Comprehensive income equals net income and unrealized income, such as unrealized gains or losses, and other non-operating gains and losses.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “nted below is information related to Viel Company at December 31, 2020, the end of its first year of operations. Sales revenue $310,000 ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers