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Preparing a multiple step income statement

E4-5 multiple step and extraordinary items) the following balances were taken from the books of parnevik corp on December 31 2010

Interest revenue 86000
cash 51,000
sales 1,280,000
accounts receivable 150,000
prepaid insurance 20,000
sales returns and allowances 150,000
allowance for doubtful accounts 7,000
sales discounts 45,000
land 100,000
equipment 200,000
building 140,000
cost of goods sold 621,000
accumulated depreciation-equipment 40,000
accumulated depreciation-building 28,000
notes receivable 155,000
selling expenses 194,000
accounts payable 170,000
bonds payable 100,000
administrative and general expenses 97,000
accrued liabilities 32,000
interest expense 60,000
notes payable 100,000
loss form earthquake damage (extraordinary item 120,000
common stock 500,000
retained earnings 21,000

Assume the total effective tax rate on all items is 34%

Prepare a multiple step income statement; 100,000 shares of common stock were outstanding during the year

Solution Summary

This solution prepares a multiple step income statement.