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Financial & Managerial Accounting 3rd Edition by Charles Horngren,Harrison, Walter,Suzanne Oliver
Edition 3ISBN: 978-0132962339Financial & Managerial Accounting 3rd Edition by Charles Horngren,Harrison, Walter,Suzanne Oliver
Edition 3ISBN: 978-0132962339 Exercise 21
Preparing a corrected combined statement of income and retained earnings
Jeff Halstrom, accountant for Home Bank Finance, was injured in a boating accident. Another employee prepared the following income statement for the year ended December 31, 2012:
The individual amounts listed on the income statement are correct. However, some accounts are reported incorrectly, and two items do not belong on the income statement at all. Also, income tax has not been applied to all appropriate figures. The income tax rate on discontinued operations is 30%. Home Bank Finance issued 54,000 shares of common stock in 2012 and held 4,000 shares as treasury stock dur-ing 2012. Retained earnings at December 31, 2011, was $164,000.
Requirement
1. Prepare a corrected combined statement of income and retained earnings for the fiscal year ended December 31, 2012. Prepare the income statement in single-step format.
Jeff Halstrom, accountant for Home Bank Finance, was injured in a boating accident. Another employee prepared the following income statement for the year ended December 31, 2012:
The individual amounts listed on the income statement are correct. However, some accounts are reported incorrectly, and two items do not belong on the income statement at all. Also, income tax has not been applied to all appropriate figures. The income tax rate on discontinued operations is 30%. Home Bank Finance issued 54,000 shares of common stock in 2012 and held 4,000 shares as treasury stock dur-ing 2012. Retained earnings at December 31, 2011, was $164,000.
Requirement
1. Prepare a corrected combined statement of income and retained earnings for the fiscal year ended December 31, 2012. Prepare the income statement in single-step format.
Explanation
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Financial & Managerial Accounting 3rd Edition by Charles Horngren,Harrison, Walter,Suzanne Oliver
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