The income tax rate is 30 hint prepare the income statement

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Reference no: EM13567886

Porter Corporation's balance sheet at December 31, 2011, is presented below.

PORTER CORPORATION Balance Sheet December 31, 2011
Cash	$14,730		Accounts payable	$8,630
Accounts receivable	21,600		Common stock	16,500
Allowance for doubtful accounts	(740	)	Retained earnings	19,460
Inventory	9,000
	$44,590			$44,590

During January 2012, the following transactions occurred. Porter uses the perpetual inventory method.

Jan. 1		Porter accepted a 4-month, 8% note from Anderko Company in payment of Anderko's $3,600 account.
3		Porter wrote off as uncollectible the accounts of Elrich Corporation ($400) and Rios Company ($300).
8		Porter purchased $15,390 of inventory on account.
11		Porter sold for $26,500 on account inventory that cost $17,110.
15		Porter sold inventory that cost $780 to Fred Berman for $1,000. Berman charged this amount on his Visa First Bank card. The service fee charged Porter by First Bank is 3%.
17		Porter collected $22,700 from customers on account.
21		Porter paid $16,630 on accounts payable.
24		Porter received payment in full ($300) from Rios Company on the account written off on January 3.
27		Porter purchased advertising supplies for $1,460 cash.
31		Porter paid other operating expenses, $3,420.

Adjustment data:

1.		Interest is recorded for the month on the note from January 1.
2.		Bad debts are expected to be 6% of the January 31, 2012, accounts receivable.
3.		A count of advertising supplies on January 31, 2012, reveals that $580 remains unused.
4.		The income tax rate is 30%. (Hint: Prepare the income statement up to "Income before taxes" and multiply by 30% to compute the amount; round to whole dollars.)

Reference no: EM13567886

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