Presented below is information related to Marin Company at December 31, 2017, th
ID: 2338854 • Letter: P
Question
Presented below is information related to Marin Company at December 31, 2017, the end of its first year of operations. Sales revenue $312,500 Cost of goods sold 126,330 Selling and administrative expenses 51,400 Gain on sale of plant assets 27,160 Unrealized gain on available-for-sale investments 9,870 Interest expense 5,400 Loss on discontinued operations 12,630 Dividends declared and paid 4,870 Compute the following: (a) Income from operations $ (b) Net income $ (c) Comprehensive income $ (d) Retained earnings balance at December 31, 2017 $
Explanation / Answer
(a)
Income from operations = Sales revenues - Cost of goods sold - Selling and administrative expenses
= $312,500 - $126,330 - $51,400
= $134,770
(b)
Net income = Income from operations - Gain on sale of plant assets - Interest expense - Loss from discontinued operations
= $134,770 + $27,160 - $5,400 - $12,630
= $143,900
(c)
Comprehensive income = Net income - Unrealized gain on available for sale investments
= $143,900 - $9,870
= $134,030
(d)
Retained earnings = Net income - Dividends
= $143,900 - $4,870
= $139,030