Intermediate Accounting
1st Edition
ISBN: 9780132162302
Author: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
Publisher: PEARSON
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Textbook Question
Chapter 5, Problem 5.3P
Multiple-step, Single-step, and Condensed Statements of Net Income. Right Angle Manufacturing Company provided the following information for the year ended December 31 for the current year.
Right Angle Manufacturing Company
For the Year Ended December 31
| Account | Debit | Credit |
| Common Stock—Beginning Balance | $ 75,000 | |
| Retained Earnings—Beginning Balance Accumulated Other Comprehensive Income—Beginning Balance |
$3,400 | 95,000 |
| Dividends | 500 | |
| Sales | 230,000 | |
| Dividend Income | 200 | |
| Interest Income | 680 | |
| Gain on Disposal of Plant Assets | 1,000 | |
| Unrealized Gain on Trading Securities Cost of Goods Sold | $75,000 | $4,000 |
Right Angle Manufacturing Company
Trial Balance (Partial)
For the Year Ended December 31
| Account | Debit | Credit |
| Selling Expenses | 1,450 | |
| Advertising Expense | 3,400 | |
| Office Supplies Expense | 1,250 | |
| Sales Salaries Expense | 145 | |
| Office Salaries Expense | 1,890 | |
| Accounting and Legal Fees—Administrative | 575 | |
| Systems Consulting Foes—General | 670 | |
| 2,350 | ||
| Amortization Expense—General | 3,000 | |
| Interest Expense | 890 | |
| Loss on Asset Impairment | 900 | |
| Loss on Discontinued Operations -Before Tax | 250 | |
| Unrealized Loss on Available for Sale Bonds | 780 |
Required
- a. Prepare a single-step income statement for the current year The tax rate is 40%.
- b. Prepare a multiple-step income statement for the current year.
- c. Prepare a condensed multiple-step income statement for the current year and include all supporting schedules.
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Chapter 5 Solutions
Intermediate Accounting
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