Prepare a formal income statement

Assignment Help Accounting Basics
Reference no: EM13874000

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

454_268-B-A-F-S (3439).png

Other financial data for the year ended December 31, 2010:
Federal income taxEstimated tax payments .................... $200,000Accrued 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. 

Reference no: EM13874000

Questions Cloud

Illustration of molecules or biomolecules : The present report is based on an illustration of molecules or biomolecules that have a chemistry related background. The topic of selection is based on cardiac care and diseases
Why don''t we just use it to help keep taxes down : Looks like a slush fund to me. Why don't we just use it to help keep taxes down? How would you advise the mayor about this matter?
Examine the company''s financials included : Examine the company's financials included
Compute macaulay and modified durations : Compute Macaulay and modified durations for the following bonds: a 5-year bond paying annual coupons of 3.322% and selling at par. an 8-year bond paying semi annual coupons with a coupon rate of 9% and a yield of 8%
Prepare a formal income statement : Before closing the books for the year ended December 31, 2010, Pitt Corp. prepared the following condensed trial balance:
What is the initial monthly payment and interest rate : A borrower is considering a 1-year adjustable rate mortgage of $250,000 that starts at 2.5%, 30 year amortization. The margin is 2.25%. The annual change caps are 2% per year. The current index is 1.25%. The life cap is 6% over the start rate. What i..
Analyze the sustainability report of a company : You will critically analyze the sustainability report of a company. How is sustainability defined in this report? How is it different from CSR? Is there a specific sustainable strategy? Policy? When, how and why was it developed
How a repeated relationship among members can secure them : Examine how a repeated relationship among the members can secure them salary in­ creases every year if (1) every member serves a 3-year term, and every year in rotation one of them is up for reelection.
Argumentative research paper : Asserts a compelling, debatable thesis Body paragraph section that identifies and develops effective claims

Reviews

Write a Review

 

Accounting Basics Questions & Answers

  Why preparation of income statement is necessary

Why is the preparation of "IncomeStatement" necessary for organizations?

  Knox company begins operations january 1 because all work

knox company begins operations january 1. because all work is done to customer specifications the company decides to

  Company change in profits

Current sales would not be affected by the special order and no additional fixed costs would be incurred on the special order. Missouri company's change in profits if the order is accepted will be a ______

  Computing deferred tax reported

Tax depreciation for the year exceeded book depreciation by $50,000. The tax rate for Year 3 was 30%, and Congress enacted a tax rate of 40% for years after Year 3. What is the deferred tax reported on William's December 31, Year 3, balance sheet?

  The stock of company xyz is currently price at 80 per

the stock of company xyz is currently price at 80 per share. its earnings this year t0 are 4.00 per share. it has paid

  Explain three issuesproblems which a company could face

describe three issuesproblems that a company could encounter when trying to determine the actual cost of a good or

  Journal entry to record the allocation of net income

Assume the partnership income-sharing agreement calls for income to be divided with a salary of $40,600 to Coburn and $35,700 to Webb, interest of 10% on beginning capital, and the remainder divided 50%-50%. Prepare the journal entry to record the..

  Bad debts analysis-allowance account

On January 1, 2010, the balance in Kubera co.'s Allowance for Bad Debts account was$9720. during the year, a total of $23900 of delinquent account receivable was written off as bad debts, the balance in the allowance for bad debts account at Decem..

  The first step in creating the master budget is the sales

the first step in creating the master budget is the sales budget. describe this budget and the information it includes.

  Calculate the estimated cash from all sources for march

Assume20% of all sales are cash sales; remaining 80% are sales on account. Calculate the estimated cash from all sources for March.

  Which cost flow method results in 1 the highest inventory

6-2b savage distribution markets cds of the performing artist little sister.nbspnbsp at the beginning of october savage

  You are hired to review the accounting records of sophia

you are hired to review the accounting records of sophia corporation before it closes its revenue and expense accounts

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