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Calculation of Net Income

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?

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