Presented below is information related to Watt Company in its first year of oper
ID: 2517779 • Letter: P
Question
Presented below is information related to Watt Company in its first year of operation. The following information is provided at December 31, 2015, the end of its first year. Sales revenue Cost of good sold Selling and administrative expenses Gain on sale of plant assets Unrealized gain on non-trading securities Financing costs Loss on discontinued operations Allocation to non-controlling interest Dividends declared and paid 420,000o 210,000 75,000 45,000 15,000 10,000 20,000 60,000 12,000 Compute the following (a) income from operations; (b) net income, (e) net income attributable to Watt Company shareholders, (d) comprehensive income, and (e'retained earnings balance at December 31 2015Explanation / Answer
(a) Operating Income Sales revenue 420000 COGS 210000 Selling & Admin exp 75000 Financing cost 10000 Operating Income 125000 (b) Net Income Sales revenue 420000 Gain on sale of Plant 45000 465000 COGS 210000 Selling & Admin exp 75000 Financing cost 10000 Loss on discontinuing operation 20000 315000 Net Income 150000 © Net income attributable Net Income 150000 Unrealised Gain 15000 165000 (d) Comprehensive Income Unrealised Gain 15000 € retained earning Net Income 150000 Dividend 12000 Retained earning 138000