Interim Reporting The Hill Company prepares quarterly and year to date interim reports. The following is its interim income statement for the quarter ended March 31, 2007:
|
Sales (net) |
$150,000 |
|
|
Cost of goods sold |
90,000 |
|
|
Gross profit |
$60,000 |
|
|
Operating expenses |
||
|
Selling expenses |
$18,000 |
|
|
General expenses |
10,600 |
|
|
Depreciation expense |
8,000 |
36,600 |
|
Pretax operating income |
$23,400 |
|
|
Other items |
||
|
Dividend revenue |
$600 |
|
|
Interest expense |
1,000 |
400 |
|
Income before income taxes |
$23,000 |
|
|
Income tax expense |
7,000 |
|
|
Net income |
$16,000 |
|
|
Earnings per share (20,000 shares) |
$0.80 |
|
On June 30, 2007, the company accountant completed a worksheet in preparation for developing the year to date interim income statement. The following are the accounts and amounts listed in the income statement debit and credit columns of this worksheet:
|
Debit |
Credit |
|
Sales (net) |
$340,000 |
|
Interest revenue |
500 |
|
Dividend revenue |
1,000 |
|
Cost of goods sold |
$190,000 |
|
Selling expenses |
50,000 |
|
General expenses |
20,000 |
|
Depreciation expense |
16,000 |
|
Interest expense |
2,100 |
|
Income tax expense |
19,200 |
Required
Based on the given information, and assuming 20,000 shares of common stock have been outstanding for the entire 6 months, for the Hill Company prepare:
1. A year to date interim income statement for the first 6 months of 2007.
2. An interim income statement for the second quarter of 2007.