Perry Company has always prepared its income statement on the current operating performance basis Because the statements
Question:
Perry Company has always prepared its income statement on the current operating performance basis Because the statements have been used strictly for internal purposes, adherence to GAAP has not been a major consideration.
In early 1993 the company’s accountant contacts you for advice in preparing income and retained earnings statements for 1992 in accordance with generally accepted accounting principles for use with a bank loan application. The accountant presents you with the following statements, which had been prepared for internal use:
You determine that all items are appropriately described and that all items subject to income tax appropriately reflect a 42% income tax rate and that the company had 75,000 shares of common stock outstanding throughout 1992.
Instructions
Prepare income and retained earnings statements for 1992 in accordance with generally accepted accounting principles, including all relevant disclosures which can be determined from the given data. Provide computations to support your financial-statement items.
Modern Advanced Accounting in Canada
ISBN: 978-1259087554
8th edition
Authors: Hilton Murray, Herauf Darrell