Intermediate Accounting------Chapter 4.docVIP

Exercise 4-1 Requirement 1 SOFI GREEK CORPORATION Income Statement For the Year Ended December 31, 2006 Revenues and gains: EUR Sales 1,500,000 Interest 30,000 Gain on sale of equipment 50,000 Total revenues and gains 1,580,000 Expenses and losses: Cost of goods sold 750,000 Salaries 160,000 Depreciation 50,000 Interest 40,000 Rent 25,000 Income tax 190,000 Total expenses and losses 1,215,000 Net income 365,000 Earnings per share 3.65 Exercise 4-1 (concluded) Requirement 2 SOFI GREEK CORPORATION Income Statement For the Year Ended December 31, 2006 EUR Sales revenue 1,500,000 Cost of goods sold 750,000 Gross profit 750,000 Operating expenses: Salaries 160,000 Depreciation 50,000 Rent 25,000 Total operating expenses 235,000 Operating income 515,000 Other income (expense): Interest revenue 30,000 Gain on sale of equipment 50,000 Interest expense (40,000) Total other income, net 40,000 Income before income taxes 555,000 Income tax expense 190,000 Net income 365,000 Earnings per share 3.65 Exercise 4-2 Requirement 1 THE AVINASH GROUP Statement of Income and Comprehensive Income (in part) For the Year Ended December 31, 2006 INR Net income 1,354,000 Other comprehensive income (loss): Foreign currency translation gain, net of tax 140,000 Unrealized losses on investment securities, net of tax (56,000) Total other comprehensive income 84,000 Comprehensive income 1,438,000 Requirement 2 THE AVINASH GROUP Statement of Comprehensive Income For the Year Ended December 31, 2006 INR Net income 1,354,000 Other comprehensive income (loss): Foreign currency translation gain, net of tax 140,000 Unrealized losses on investment securi