Prepare a multiplc-step income statement

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Reference no: EM13494583

Porter Corporation's capital structure consists of 50,000 shares of common stock. At December 31. 2010 an analysis of the accounts and discussions with company officials revealed the following information:

Sales

$1,100,000

Purchase discounts

18,000

Purchases

642,000

Earthquake loss (net of tax) (extraordinary item)

42,000

Selling expenses

128,000

Cash

60,000

Accounts receivable

90,000

Common stock

200,000

Accumulated depreciation

180,000

'Dividend revenue

8,000

Inventory, January 1, 2010

152,000

Inventory, December 31, 2010

125,000

Unearned service revenue

4,400

Accrued interest payable

1,000

1.aml

370,000

Patents

100,000

Retained earnings, January 1, 2010

290,000

Interest expense

17,000

General and administrative expenses

150,000

Dividends declared

29,000

Allowance for doubtful accounts

5,000

Notes payable (maturity 7/1113)

200,000

Machinery and equipment

450,000

/Materials and supplies

40,000

Accounts payable

60,000

 

The amount of income taxes applicable to ordinary income was $48,600, excluding the tax effect of the earthquake loss which amounted to $18,000.

Instructions

(a)      Prepare a multiplc-step income statement.

(b)      Prepare a retained earnings statement.

Reference no: EM13494583

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