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    Calculation of Net Income

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    Net Income
    A summary of the operations of Streuling Company for the year ended May 31, 2006, is shown
    below.
    Advertising expense . . . . . . . . . $ 2,760
    Supplies expense . . . . . . . . . . . 37,820
    Rent expense . . . . . . . . . . . . . . 1,500
    Salaries expense . . . . . . . . . . . . 18,150
    Miscellaneous expense . . . . . . . 4,170
    Dividends . . . . . . . . . . . . . . . . . 12,400
    Retained earnings (6/1/05) . . . . . 156,540
    Income taxes . . . . . . . . . . . . . . . 21,180
    Consulting fees (revenues) . . . . 115,100
    Administrative expense . . . . . . . 7,250
    Required:
    1. Determine the net income for the year by preparing an income statement. (Assume that
    3,000 shares of stock are outstanding.)
    2. Interpretive Question: Assuming an operating loss for the year, is it a good idea for Streuling to still pay its shareholders dividends?

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    Solution Preview

    Please find attached, an MS Excel spreadsheet containing the answers to the questions below, as well as formatted income and ...

    Solution Summary

    This file contains a formatted MS Excel spreadsheet for the calculation of net income for the Streuling Company

    $2.19

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