Accrual-based 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:- Accrual-based income statement for 2011

Show the expatriation tax, Q. Show the Expatriation Tax? Expatriation T...

Q. Show the Expatriation Tax? Expatriation Tax - Individuals who loose or terminate their residency within 10 year period immediately preceding the close of a tax year, if term

brooks''s stock, Investors need a 15% rate of return on Brooks Sisters' st...

Investors need a 15% rate of return on Brooks Sisters' stock (rs = 15%). a.  What would the value of Brooks's stock be if the last dividend was D0 = $1.5 and if investors expect

What is lifetime learning credit, Q. What is Lifetime Learning Credit? ...

Q. What is Lifetime Learning Credit? Lifetime Learning Credit - This allows a credit for 20 percent of qualified tuition and fees paid by taxpayer with respect to one or more s

Ifrs guidelines, IFRS guidelines IFRSs Gives the guideline on the conte...

IFRS guidelines IFRSs Gives the guideline on the content and the accounting statements of certain events and transactions in the financial statements. The following IFRSs are r

Determine the present value - annuity, Assume you are receiving an amount ...

Assume you are receiving an amount of Rs.5000 twice in a year for subsequent five years one time at the starting of the year and another amount of Rs. 5000 at the ending of the yea

Powers of investment-trust laws and accounts, POWERS OF INVESTMENT The ...

POWERS OF INVESTMENT The trustees have a duty to obtain control of trust assets and to invest trust funds in authorised securities.   The trustees may invest in such securities

What was wasser''s capital balance at the end of 2011, Cleary, Wasser, and ...

Cleary, Wasser, and Nolan formed a partnership on January 1, 2010, with investments of $100,000, $150,000, and $200,000, respectively. For division of income, they agreed to (1) in

Calculated market capitalization, What have been the dividends per share? ...

What have been the dividends per share? What is the CAGR of dividends per share from 2008 to 2010? What was the retention ratio for 2008 to 2010? Calculate the DPS growth

Abatement of legacies-executorship laws and accounts, ABATEMENT OF LEGACIES...

ABATEMENT OF LEGACIES (a) If the assets, after the payment of debts, necessary expenses and specific legacies, are not sufficient to pay all the general legacies in full, the l

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