Chapter 7
Corporations: The Financial Statements
331
Application Questions Group A
AP-1A (
2
)
Green Light Emissions Everyday (otherwise known as GLEE Corporation) has sales of $400,000
and Cost of Goods Sold of $120,000 for the year ended December 31, 2016. It also has salaries
expense of $80,000 and miscellaneous operating expenses of $20,000. Prepare an income
statement under ASPE taking into account income tax expense. Assume a tax rate of 30%.
AP-2A (
2
)
Budokan Company, a corporation with a December 31 year-end, has sales of $530,000, cost of
goods sold of $120,000, selling expense of $70,000, administrative expense of $200,000, tax
expense of $40,000 and basic and diluted earnings per share of $5.5 in 2016.
Required
a) Prepare an income statement under ASPE for the year ended December 31, 2016.
