Reference no: EM13874204

Before closing the books for the year ended December 31, 2010, Pitt Corp. prepared the following condensed trial balance: 

Other financial data for the year ended December 31, 2010:

Federal income tax
Estimated tax payments .................... $200,000
Accrued 100,000
Total charged to income tax expense (Does not properly reflect 
current or deferred income tax expense or interperiod income tax 
allocation for income statement purposes.) .............. $300,000
Pitt applied the provisions of generally accepted accounting principles for income taxes in its financial statements for the year 
ended December 31, 2010. The enacted tax rate on all types of taxable income for the current and future years is 30%. 
The alternative minimum tax is less than the regular income tax.
Temporary difference
Excess of book basis over tax basis in depreciable assets (arising from equipment
donated as a capital contribution on December 31, 2010, and expected to be
depreciated over five years beginning in 2011). There were no temporary
differences prior to 2010. ................. $90,000
Nondeductible expenditure
Officers life insurance expense .............. $70,000
Earthquake damage
This damage is considered unusual and infrequent.
Capital structure
Common stock, par value $5 per share, traded on a national exchange:
Number of shares:
Outstanding at 1/1/10 ................ 200,000
Issued on 3/30/10 as a 10% stock dividend ......... 20,000
Sold for $25 per share on 6/30/10 ............ 30,000
Outstanding at 12/31/10 ............... 250,000

Required:
1. Using the multiplestep format, prepare a formal income statement for Pitt for the year ended December 31, 2010.
2. Prepare a schedule to reconcile net income to taxable income reportable on Pitts tax return for2010.