Prepare an income statement in proper format

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Reference no: EM13170712

At December 31, 2011 an analysis of the accounts of Cherry Co. Ltd. revealed the following information

following information:
Land	$740„000
Patents	200,000
Retained earnings, January 1, 2011	580,000
interest expense	34,000
General and administrative expenses	300,000
Dividends declared	58.000
Allowance for doubtful accounts	10.000
Notes payable (maturity 7/1114)	100,000
Machinery and equipment	900,000
Materials and supplies	80,000
Accounts payable	120,000
Sales	2,200„000
Purchase discounts	36.000
Purchases	1,284,000
Loss on discontinued operations (net of tax)	84,000
Selling expenses	256,000
Cash	120,000
Accounts receivable	180,000
Share capital	400,000
Accumulated depreciation	360,000
Dividend revenue	16,000
Inventory, January 1, 2011	304 000
Inventory, December 31, 2011	250,000
Unearned service revenue	8,800
Accrued interest payable	2,000

The amount of income taxes applicable lo ordinary income was $97,200., excluding the tax effect of the discontinued operations loss which amounted to $36,000, Cherry's capital structure consists of 50,000 ordinary shares.

Instructions

(a) Prepare an income statement in proper format in 2011.

(b) Prepare a retained earnings statement in proper format in 2011.

Reference no: EM13170712

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