The income statement below was prepared by a new and inexperienced employee in the accounting department of Phoenix, Inc., a business organized as a corporation.

a. Prepare a corrected income statement for the year ended December 31, 2011, using the format illustrated in Exhibit 12–2. Include at the bottom of your income statement all appropriate earnings-per-share figures. Assume that throughout the year the company had outstanding a weighted average of 180,000 shares of a single class of capital stock.
b. Prepare a statement of retained earnings for 2011. (As originally reported, retained earnings at
December 31, 2010, amounted to $2,175,000.)
c. What does the $62,000 “gain on sale of treasury stock” represent? How would you report this item in Phoenix’s financial statements at December 31,2011?

  • CreatedApril 17, 2014
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