Presented below is information related to Farr Company. Cash $30,000 Taxes payable 3,000 Accumulated depreciation building

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Question:

Presented below is information related to Farr Company.

Cash $30,000

Taxes payable 3,000

Accumulated depreciation – building 15,000

Salaries payable 900

Supplies 1,860

Buildings 80,400

Common stock 60,000

Accumulated depreciation – equipment 10,000

Prepaid advertising 5,000 Bonds payable (due in 9 years) 78,000

Notes payable (due in 6 months) 14,400

Land 137,320

Inventory 102,000

Interest payable 600

Equipment 40,000

Retained earnings, December 31, 2010 119,280

Sales 1,400,000

Selling and administrative expenses 240,000

Hurricane loss (pre-tax) on plant (extraordinary item) 290,000

Cash dividends declared on common stock 33,600

Cost of goods sold 780,000

Gain resulting from computation error on depreciation charge in 2009 (pre-tax) 52,000

Other revenue 120,000

Other expenses 100,000

Instructions:

Prepare in good form a multiple-step income statement (including earnings per share information), a statement of retained earnings and a classified balance sheet for Farr Company for the year 2011. Assume a 30% tax rate and that 20,000 shares of common stock were outstanding during the year.