3. Prepare a multi-step income statement from the following information

( 5 marks)

Income statement and retained earnings statement.

Porter Corporation's capital structure consists of 50,000 shares of common stock. At December

31, 2012 an analysis of the accounts and discussions with company officials revealed the

following information:

Sales revenue $1,100,000

Purchase discounts 18,000

Purchases 692,000

Earthquake loss (net of tax) (extraordinary item) 35,000

Selling expenses 128,000

Cash 60,000

Accounts receivable 90,000

Common stock 200,000

Accumulated depreciation-machinery 180,000

Dividend revenue 8,000

Inventory, January 1, 2012 152,000

Inventory, December 31, 2012 125,000

Unearned service revenue 4,400

Interest payable 1,000

Land 370,000

Patents 100,000

Retained earnings, January 1, 2012 290,000

Interest expense 17,000

Administrative expenses 170,000

Dividends declared 24,000

Allowance for doubtful accounts 5,000

Notes payable (maturity 7/1/15) 200,000

Machinery 450,000

Materials 40,000

Accounts payable 60,000

S0000 20000 Particulars Debit (RO) Credit (RO) Cash 10000 Opening Stock 15000 Purchase returns 500 Computer 2500 Accumulated depreciation Accounts payable Note payable Capital Retained earnings 10500 Dividends Sales 252000 Sales discount 1000 Sales returns and allowances 2000 Carriage inwards 20000 Direct wages 50000 Salesman's salary 25000 Advertisement 10000 Furniture 10000 Interest expense 500 Rent received 15000 Account receivable 5000 Land and Building 72900 Purchases 80000 Printing and stationery 5000 328900328900 Closing stock is RO 5000