Items 1 and 2 are based on the following:
Vane Co.’s trial balance of income statement accounts for the year ended December 31, 2007, included the following:
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|
Debit |
Credit |
|
|
Sales |
$575,000 |
|
|
Cost of sales |
$240,000 |
|
|
Administrative expenses |
70,000 |
|
|
Loss on sale of equipment |
10,000 |
|
|
Sales commissions |
50,000 |
|
|
Interest revenue |
25,000 |
|
|
Freight out |
15,000 |
|
|
Loss on early retirement of long-term debt |
20,000 |
|
|
Uncollectible accounts expense |
15,000 |
________ |
|
Totals |
$420,000 |
$600,000 |
|
Other information |
||
|
Finished goods inventory: |
||
|
January 1, 2007 |
$400,000 |
|
|
December 31, 2007 |
360,000 |
|
Vane’s income tax rate is 30%. In Vane’s 2007 multiple-step income statement,
What amount should Vane report as the cost of goods manufactured?
- $200,000
- $215,000
- $280,000
- $295,000
What amount should Vane report as income after income taxes from continuing operations?
- $126,000
- $129,500
- $140,000
- $147,000