Quarterly Statements Ander Corporation prepares quarterly financial statements. During 2000, the following events occurred:

1. The company’s total sales of $780,000 occurred by quarter, as follows: 20%, 40%, 15%, and 25%.

2. Quarterly cost of goods sold was $55,000, $170,000,

$85,000, and $90,000, respectively.

3. Annual depreciation on the company’s headquarters and sales facilities was $60,000.

. The president’s salary was $50,000.

. Other operating costs totaled $90,000.

. Income taxes of 40 percent must be paid on all income.

. An extraordinary earthquake loss of $20,000 occurred in the third quarter.

er BSS Sony Required:

a. Prepare an income statement for the year 2000 for Ander Corporation.

b. Prepare Ander’s quarterly income statements for each quarter of 2000.

c. What information is provided by looking at the quarterly statements that might not be evident from the annual statements? Would the management of Ander be satisfied if one-half of the net income for 2000 was earned by June 30, 2000? Explain.

d. What basic concept of accounting suggests the need for financial reporting more frequently than once a year? Why might this be particularly important for Ander?

e. What types of comparisons with other companies are made possible through the presentation of quarterly earnings? What other comparisons might be important?