Prepare income statement for 2011, Financial Accounting

Assignment Help:

The Wanless Corporation provides Internet consulting services to a wide-range of customers. The company's fiscal year ends on December 31. For the year ended December 31, 2011, the company collected $1,300,000 from regular customers and paid out $650,000 for various operating expenses (not including income taxes and restructuring costs). The following information also is available.


Partial balance sheet information:
12/31/11 12/31/10
Accounting receivable 120,000 95,000
Accounts payable (for operating expenses) 50,000 65,000

Additional facts:

1. Depreciation expense for 2011 totaled $70,000.

2. There were no bad debt write offs during the year.

3. During the year, the company incurred a loss of $100,000 from hurricane damage to one of its buildings. The loss is material and the event is considered to be unusual and infrequent.

4. On December 31, 2011, a piece of land that the company purchased as an investment was sold for $400,000. The land cost Wanless $160,000. Terms of the sale were as follows: $50,000 down payment and the remainder to be paid in seven equal annual installments of $50,000 (plus interest) due each December 31, beginning December 31, 2012. Because of the uncertainty surrounding the collection of the installment receivable, the company decided to use the installment sales method to recognize gain on sale of the land. The gain is not considered extraordinary.

5. The company incurred restructuring costs of $200,000 in 2011, all of which were paid in cash as of year-end. The cash payment is in addition to the $650,000 paid for other operating expenses.

6. The company's income tax rate is 40% on all items of income or loss.

Required: (Show all computations): Prepare a multiple-step, accrual-based income statement for 2011 applying generally accepted accounting principles. Wanless Corporation is a publicly traded corporation with 100,000 shares of common stock outstanding throughout the year.


Related Discussions:- Prepare income statement for 2011

Probability analysis, Probability Analysis This engrosses the assessmen...

Probability Analysis This engrosses the assessment of the probabilities of future events linked to an investment project. If these events are universal circumstances the techni

Financial ratios, Financial ratios have been categorized in a variety of ma...

Financial ratios have been categorized in a variety of manners. You may determine the subsequent broad bases having been utilized in current literature:  Primacy Criterion: Th

Revenue recognition, Revenue recognition is a joint project of financial ac...

Revenue recognition is a joint project of financial accounting standard board and international accounting standard board.1.identify the roles and objectives of FASB and IASB?.2. W

Fiscal policy , Fiscal Policy In a democracy, elected officials of the...

Fiscal Policy In a democracy, elected officials of the government create programs for the general welfare of the population. To pay for these programs, the government taxes in

Acc 400, d. Prepare the summary journal entry required to transfer finished...

d. Prepare the summary journal entry required to transfer finished component kits from the Cutting Department to the Finishing Department in January. e. Compute the total cost assi

Trade credit, Trade credit creates accounts or debtors receivables. Trade c...

Trade credit creates accounts or debtors receivables. Trade credit is utilized as a marketing tool to expand competitive advantage over trade rivals. A firm's investment in account

Calculate total hourly cost of industrial parts, McM Cog is a supplier of i...

McM Cog is a supplier of industrial parts.  Most orders are received at a call center. The call center currently has 10 phone lines total, i.e., a maximum of 10 callers may be in t

Earnings per share, Rockland Corporation earned net income of $346,500 in 2...

Rockland Corporation earned net income of $346,500 in 2012 and had 100,000 shares of common stock outstanding throughout the year. Also outstanding all year was $924,000 of 10% bon

Characteristics of accounting information?, According to the FASB, the usef...

According to the FASB, the usefulness of accounting is judged by which of the following two qualitative characteristics of accounting information? Comparability and neutrality Unde

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd