Reference no: EM13830254
Porter Corporation's capital structure consists of 50,000 shares of common stock. On December 31, 2012, an analysis of the accounts and discussions with company officials revealed the following information:
Sales revenue $1,100,000
Purchase discounts 18,000
Purchases 692,000
Earthquake loss (net of tax) (extraordinary item) 35,000
Selling expenses 128,000
Cash 60,000
Accounts receivable 90,000
Common stock 200,000
Accumulated depreciation-machinery 180,000
Dividend revenue 8,000
Inventory, January 1, 2012 152,000
Inventory, December 31, 2012 125,000
Unearned service revenue 4,400
Interest payable 1,000
Land 370,000
Patents 100,000
Retained earnings, January 1, 2012 290,000
Interest expense 17,000
Administrative expenses 170,000
Dividends declared 24,000
Allowance for doubtful accounts 5,000
Notes payable (maturity July 1, 2015) 200,000
Machinery 450,000
Materials 40,000
Accounts payable 60,000
The amount of income taxes applicable to ordinary income was $27,600, excluding the tax effect of the earthquake loss which amounted to $15,000.
Using the data given above, you are required to do the following:
•Prepare a multiple-step income statement.
•Prepare a retained earnings statement.