Purchase Solution

Income Statement/Retained Earnings Statement

Not what you're looking for?

Ask Custom Question

Olson Corporation's capital structure consists of 40,000 shares of
common stock. At December 31, 2004, an analysis of the accounts and
discussions with company officials revealed the following
information:

Sales $1,400,000
Purchase discounts 18,000
Purchases 820,000
Earthquake loss (net of tax) (extraordinary item) 42,000
Selling expenses 128,000
Cash 60,000
Accounts receivable 90,000
Common stock 200,000
Accumulated depreciation 180,000
Dividend revenue 8,000
Inventory, January 1, 2004 152,000
Inventory, December 31, 2004 125,000
Unearned service revenue 4,400
Accrued interest payable 1,000
Land 370,000
Patents 100,000
Retained earnings, January 1, 2004 270,000
Interest expense 17,000
Cumulative effect of change from straight-line to
accelerated depreciation (net of tax) 28,000
General and administrative expenses 210,000
Dividends declared 29,000
Allowance for doubtful accounts 5,000
Notes payable (maturity 7/1/07) 200,000
Machinery and equipment 450,000
Materials and supplies 40,000
Accounts payable 60,000

The amount of income taxes applicable to ordinary income was
$67,200, excluding the tax effect of the earthquake loss which
amounted to $18,000 and the tax effect of the change of accounting
principle which was $12,000.

INSTRUCTIONS
(a) Prepare a multiple-step income statement.
(b) Prepare a retained earnings statement.

Purchase this Solution

Solution Summary

The solution explains how to prepare a multiple step income statement and a Statement of Retained Earnings

Purchase this Solution


Free BrainMass Quizzes
Marketing Management Philosophies Quiz

A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.

Employee Orientation

Test your knowledge of employee orientation with this fun and informative quiz. This quiz is meant for beginner and advanced students as well as professionals already working in the HR field.

Accounting: Statement of Cash flows

This quiz tests your knowledge of the components of the statements of cash flows and the methods used to determine cash flows.

Marketing Research and Forecasting

The following quiz will assess your ability to identify steps in the marketing research process. Understanding this information will provide fundamental knowledge related to marketing research.

Cost Concepts: Analyzing Costs in Managerial Accounting

This quiz gives students the opportunity to assess their knowledge of cost concepts used in managerial accounting such as opportunity costs, marginal costs, relevant costs and the benefits and relationships that derive from them.