3 information about iron horses which sells motorcycles is shown below common shares 4352218

3.Information about Iron Horses, which sells motorcycles, is shown below:

Common shares outstanding20,000

Advertising expense24,000

Cost of goods sold660,000

Depreciation expense28,000

Income tax expense20,000

Income tax payable14,000

Interest expense10,000

Payments to owners30,000

Retained earnings70,000

Salaries expense120,000

Sales revenue900,000


Compute (a) gross profit, (b) income from operations, (c) net income and (d) earnings per share for the period.

4.Environmental Company reported the following income statement for November 2007:

Environmental Company

Income Statement

For the Month Ended November 30, 2007


Cost of sales238,000


Selling expense27,000

General and administrative expense18,500

Other income and expense, net4,500


Income before income taxes31,000

Provision for income tax10,000




Determine (a) gross profit, (b) product cost expensed during year, (c) non-product operating expenses, (d) operating income, (e) net income and (f) earnings per share.

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