Ace Company’s income statements for the three years 2012, 2011, and 2010 are given below (all amounts in $ millions):,1. Other income (expense) comprised the following:,2. In 2012, cost of goods sold included inventory write-off of $ 45 million. This write-off pertained to obsolete inventory that was not sold for many years. Much of the written down inventory was unsold at the end of 2012.,3. Selling, general administration included share compensation expense of $23, $25, and $22 million, respectively, for 2012, 2011, and 2010. This expense relates to option grants given to the new CEO in 2010, which was valued at around $70 million on the date of grant.,4. The restructuring charge in 2010 was taken to significantly downsize and streamline operations and close a number of underperforming businesses. Of the charge of $765 million, $312 million was in the form of asset impairments and the remaining $453 million was cash payments related to lease cancellations, employee retrenchment, and reorganization costs. It was expected that this restructuring would lead to cost reductions and improved efficiency that would last at least five years.,The following items were reported in the statement of shareholders’ equity:,5. The company has significant office property that is reported at amortized cost on the balance sheet. The fair market value of this property was considerably larger than its amortized cost, as shown in the table below:,Assume a marginal tax rate of 35% on all adjustments made to income.,Required:,For all three years determine ,(1) Core income, ,(2) Comprehensive income, ,(3) Sustainable income, and ,(4) Economic income. Explain the basis for yourcalculations.

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Why does an organization prepare a balance sheet? a. to reveal what the organization owns and owes at a point in time b. to reveal how well the company utilizes its cash c. to calculate retained earnings for a given accounting period d. to calculate gross profit for a given accounting period

Fred smithers, a recent college graduate decided to open his own portable juice bar, smithers smoothies, to wheel around newport beach. you, a trusted friend of fred, are a business major that has also recently graduated and agreed to handle the books for a while to get some practical experience and have a favor that you can ask of fred in the future. given the following five transactions concerning the new venture, prepare the necessary journal entries for the transactions, post the journal entries to appropriate t accounts and prepare a trial balance as of the end of the month in order to answer to the necessary may 2: fred invests $12,000 of his own money to start the new company. this money was obtained from a part-time job working at a legal firm while he was in school. may 3: fred spent $5,100 cash to purchase a refrigerated trailer that he can pull behind his car and set up at the beach. under your advice, fred agrees to place the new asset under an account called "equipment." may 6: fred bought $640 of supplies on account from the flav-o-rite confectioners company. because they will last longer than a single accounting period fred agrees to record them as, "supplies" as per your suggestion. may 13: fred sat on the beach for six hours without a single sale and was feeling very down. right before he left, however, a plumber escorting his family reunion along the beach stopped by his stand and bought $800 worth of smoothies for the entire family. under your advice, fred agrees to call this cash revenue, "sales." may 15: excited about his new venture, fred withdraws $350 from the company to take his girlfriend out to dinner. what would be the balance in the cash account at the end of the period following the posting of all the transactions?