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

Abraham maslow''s hierarchy of needs theory, Motivation is said to be an in...

Motivation is said to be an internal state that energises an individual to engage in certain types of behaviours. This process is triggered when the individual experiences certain

Voluntary settlements-bankruptcy, Voluntary settlements The trustee can...

Voluntary settlements The trustee can claim all property settled by the bankrupt on other persons within two years preceding the bankruptcy unless made: a. Before and in consi

According to the management perspective cost , Cost: - According to the ma...

Cost: - According to the management perspective cost is define as a reduction in the value of assets for to secure benefit or gain. In other words cost is the different expenses

Calculate the payback and discounted payback periods, Assume that the compa...

Assume that the company has an investment opportunity. Building a new factory would cost $750 million but would reduce cash operating costs by $150 million per year for the next 1

What is the net present value of project, Red Lake Mines, Inc. is consideri...

Red Lake Mines, Inc. is considering adoption of a new project requiring a net investment of $10 million. The project is expected to generate 5 years of net cash inflows of $5 milli

Determine the nash equilibrium of the cournot game, We consider N identical...

We consider N identical firms that compete à la Cournot. Each firm incurs a constant marginal cost c. The demand for the homogenous good is given by the following function: Q = 1 -

Income statements, how to solve the question income statements

how to solve the question income statements

Discount rate to the estimated npv of the investment, Q. Discount rate to t...

Q. Discount rate to the estimated NPV of the investment? There is no necessity to round the solution up to the nearest whole percentage. NPV approximate may be made using the e

What is the net cash provided by investing activities, Zoum Corporation had...

Zoum Corporation had the following transactions during 2014: 1. Issued $125,000 of par value common stock for cash. 2. Recorded and paid wages expense of $60,000. 3. Acquired land

Breakeven, Baseball Products manufactures a single product with the followi...

Baseball Products manufactures a single product with the following full unit costs at a volume of 2,000 units: Direct materials $ 900 Direct labor 360 Manufacturing overhead* 6

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