Foxworthy corporation | Accounting homework help
The following income statement items appeared on the adjusted trial balance of Foxworthy Corporation for the year ended December 31, 2011 ($ in 000s): sales revenue, $22,300; cost of goods sold, $14,500; selling expenses, $2,300; general and administrative expenses, $1,200; dividend revenue from investments, $200; interest expense, $300. Income taxes have not yet been accrued. The company’s income tax rate is 40% on all items of income or loss. These revenue and expense items appear in the company’s income statement every year. The company’s controller, however, has asked for your help in determining the appropriate treatment of the following nonrecurring transactions that also occurred during 2011 ($ in 000s). All transactions are material in amount.
a. Investments were sold during the year at a loss of $300. Foxworthy also had unrealized losses of $200 for the year on investments accounted for as securities available for sale.
b. One of the company’s factories was closed during the year. Restructuring costs incurred were $2,000.
c. One of Foxworthy’s manufacturing facilities located in a foreign country was expropriated. A loss of $800 was recognized. The event is considered to be unusual and infrequent.
d. the year, Foxworthy completed the sale of one of its operating divisions that qualifies as a component of the entity according to GAAP regarding discontinued operations. The division had incurred operating income of $800 in 2011 prior to the sale, and its assets were sold at a loss of $1,800.
e. In 2011, the company’s accountant discovered that depreciation expense in 2010 for the office building was overstated by $300.
6. Foreign currency translation gains for the year totaled $600.
Required: Prepare Foxworthy’s combined statement of income and comprehensive income for 2011, including basic earnings per share disclosures. Two million shares of common stock were outstanding throughout the year.