Problem 117 (Part Level Submission) (a) Prepare a multiple-step income statement
ID: 2342156 • Letter: P
Question
Problem 117 (Part Level Submission)
(a)
Prepare a multiple-step income statement.
Problem 117 (Part Level Submission)
Porter Corporation's capital structure consists of 50,000 shares of common stock. At December 31, 2017 an analysis of the accounts and discussions with company officials revealed the following information:Sales revenue $1,222,800 Discontinued operations loss (net of tax) 59,360 Selling expenses 129,590 Cash 59,380 Accounts receivable 91,900 Common stock 200,000 Cost of goods sold 700,040 Accumulated depreciation-machinery 178,312 Dividend revenue 8,420 Unearned service revenue 4,460 Interest payable 1,060 Land 377,460 Patents 106,650 Retained earnings, January 1, 2017 277,341 Interest expense 16,940 Administrative expenses 174,360 Dividends declared 26,790 Allowance for doubtful accounts 5,310 Notes payable (maturity 7/1/20) 205,830 Machinery 445,780 Materials 38,120 Accounts payable 59,750
The amount of income taxes applicable to ordinary income was $63,087, excluding the tax effect of the discontinued operations loss which amounted to $25,440.
Explanation / Answer
less:cost of goods sold (700040) Gross margin 522760 less:selling and administration expense sellling expense (129590) Administrative expenses (174,360) Total selling and administration expense (303950) Income from ordinary operations 218810 other income /(expense) Dividend revenue 8420 Interest expense (16940) Total other income /(expense) 8520 Income from continuing operations (before tax) 210290 less:income tax expense (63087) Income from continuing operations (after tax) 147203 Income /(loss)from discontinued operations Discontinued operations loss (net of tax) (59360) Net income 87843