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Accounting

Problem:

The following items are from Taperline Corporation on December 31, 2010. Assume a flat 40% corporate tax rate on all items, including the casualty loss.

Sales .................................................... $670,000
Rental income ......................................... 3,600
Gain on the sale of fixed assets ..................... 3,000
General and administrative expenses ............... 110,000
Selling expenses ....................................... 97,000
Interest expense ........................................ 1,900
Depreciation for the period ........................... 10,000
Extraordinary item (casualty loss-pretax) ......... 30,000
Cost of sales ............................................. 300,000
Common stock (30,000 shares outstanding) ......... 150,000

Task:

Question 1: Prepare a single-step income statement for the year ended December 31, 2010. Include earnings per share for earnings before extraordinary items and net income.

Question 2: Prepare a multiple-step income statement. Include earnings per share for earnings before extraordinary items and net income.

Note: Provide support for your rationale.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91172763

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