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

Acquisition during the financial period-group accounts, Acquisition during ...

Acquisition during the financial period The holding company may acquire the subsidiary company partway through the financial period such that as at the balance sheet date, the

How to prepare annual financial statements, "Government departments should ...

"Government departments should take audit report seriously by preparing annual financial statement on time".... Based on the above statement, suggest ways on how government depa

What about a foreign-based multinational corporation, Does a state have the...

Does a state have the authority to require a U.S.-based multinational corporation to compute its state taxable income on a worldwide combined reporting basis? What about a foreign-

Introduction to pension funds, Introduction to Pension funds Pension fu...

Introduction to Pension funds Pension funds are normally set up to provide pension benefits to employees who have retired. The pension funds receive contributions mainly from e

Amortization of patents, Nieland Industries had one patent recorded on its ...

Nieland Industries had one patent recorded on its books as of January 1, 2014. This patent had a book value of $288,000 and a remaining useful life of 8 years. During 2014, Nieland

Types of interest given under a will-executorship laws, Types of interest g...

Types of interest given under a will The interest given in a legacy, devise or gift of residue may be of the following kinds:- 1. Vested: A vested interest gives an immedi

Use net present value and payback period method, Given the following cash f...

Given the following cash flows for projects A and B:   Year      Project A   Project B     0       -100,000     -150,000   (Project Cost)     1         25,000

Determine the total production requirement for the month, A Company policy ...

A Company policy calls for keeping safety-stock equal to 25% the forecasted demand for that month.  The company currently has a work force of 12 people.  It takes a worker 3 hours

Estimate the montly sales budget, Your friend Peter is planning to set up a...

Your friend Peter is planning to set up a new business which will manufacture and sell wooden tables. The parts that make up the table consist of a wooden table top measuring 1m by

Inventory turnover, During 2014, Victoria’s Fashion had beginning inventory...

During 2014, Victoria’s Fashion had beginning inventory of $480,000, ending inventory of $560,000, and cost of goods sold of $2,200,000. Compute the inventory turnover and days’ in

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