Most Visited Getting Started e UPAT Mail e at specialties l

?Most Visited @ Getting Started e UPAT Mail e at specialties liwo Chapter 12 Assignment Required Saved Help Save & Exit Submit Check my work Exercise 12.12 Comprehensive Income (L012-7) 10 points Minor, Inc., had revenue of $636,000 and expenses (other than income taxes) of $284,000 for the current year. T subject to a 35 percent income tax rate. In addition, available-for-sale investments, which were purchased for $17.500 early in the ye had a market value at the end of the year of $19,200. eBook a. Determine the amount of Minor\'s net income for the year. b. Determine the total amount of Minor\'s comprehensive income for the year Ask c. How would your answers to parts a and b d iffer if the market value of Minor\'s investments at the end of the year had been $14,200? Print a. Net income C-1. Net income C-2. Comprehensive income Mc Graw Hill Prev 1 of 3Next 929

Solution

1). a). Net Income :-
Revenue = $636,000
Less: Expenses = $284,000
Earning before Taxes = $352000
Less: Income Tax 35% = $123200
Earning after Tax = $228800

b). Comprehensive Income :-
Revenue = $636,000
Less: Expenses = $284,000
Profit = $352000
Add: Comprehensive Income = $1700 ($19200 - $17500)
Earning before Taxes = $353700
Less: Income Tax 35% = $123795
Earnings after Tax = $229905

c) Net Income will remain same as there is no change in details.
Comprehensive Income :-
Revenue = $636,000
Less: Expenses = $284,000
Profit = $352000
Less: Comprehensive Loss = $3300 ($14200 - $17500)
Earning before Taxes = $348700
Less: Income Tax 35% = $122045
Earnings after Tax = $226655

2). Market Capitalisation before dividend = 86000 shares * $60 = $5,160,000
Dividend declared = 10% stock dividend means 1 share for every 10 shares.
No. of shares after dividend = 86000 + (86000*10%) = 94600 shares
Market price of common stock on ex-dividend date = $5,160,000 / 94600 shares = $54.54 per share.
Here because of stock dividend no. of shares increased while there is no change in the market value of the company hence the market capitalisation remains same.