Wang Corporation's capital structure consists of 50,000 ordinaryshares. At December 31, 2011 an analysis of the accounts anddiscussions with company officials revealed the followinginformation:
Sales ¥1,100,000
Purchasediscounts 18,000
Purchases 642,000
Loss on discontinued operations (net oftax) 42,000
Sellingexpenses 128,000
Cash 60,000
Accountsreceivable 90,000
Sharecapital 200,000
Accumulateddepreciation 180,000
Dividendrevenue 8,000
Inventory, January 1,2011 152,000
Inventory, December 31,2011 125,000
Unearned servicerevenue 4,400
Accrued interestpayable 1,000
Land 370,000
Patents 100,000
Retained earnings, January 1,2011 290,000
Interestexpense 17,000
General and administrativeexpenses 150,000
Dividendsdeclared 29,000
Allowance for doubtfulaccounts 5,000
Notes payable (maturity7/1/14) 200,000
Machinery andequipment 450,000
Materials andsupplies 40,000
Accountspayable 60,000
The amount of income taxes applicable to ordinary income was¥48,600, excluding the tax effect of the discontinued operationsloss, which amounted to ¥18,000.
Instructions
(a) Prepare an income statement.
(b) Prepare a retainedearnings statement.
