AICPA Adapted Comparative Income Statements The Century Company, a diversified manufacturing company, had four separate operating divisions engaged in the manufacture of products in each of the following areas: food products, health aids, textiles, and office equipment. Financial data for the 2 years ended December 31, 2011 and 2010 are presented here: On January 1, 2011, Century adopted a plan to sell the assets and product line of the office equipment division and considered it a component of the company. On September 1, 2011, the division’s assets and product line were sold for $2,100,000 cash, resulting in a gain of $640,000. The company’s textiles division had six manufacturing plants that produced a variety of textile products. In April 2011, the company sold one of these plants and realized a gain of $130,000. After the sale, the operations at the plant that was sold were transferred to the remaining five textile plants, which the company continued to operate In August 2011, the main warehouse of the food products division, located on the banks of the Bayer River, was flooded when the river overflowed. The resulting damage of $420,000 is not included in the financial data given previously. Historical records indicate that the Bayer River normally overflows every 4 to 5 years, causing flood damage to adjacent property. For the 2 years ended December 31, 2011 and 2010, the company had interest revenue earned on investments of $70,000 and $40,000, respectively. The provision for income tax expense for each of the 2 years should be computed at a rate of 40%. Required Prepare in proper form a multiple-step comparative statement of income of the Century Company for the 2 years ended December 31, 2011 and December 31, 2010. Earnings per share information and footnotes are not required.
AICPA Adapted Comparative Income Statements The Century Company, a diversified manufacturing company, had four separate operating divisions engaged in the manufacture of products in each of the following areas: food products, health aids, textiles, and office equipment. Financial data for the 2 years ended December 31, 2011 and 2010 are presented here:
On January 1, 2011, Century adopted a plan to sell the assets and product line of the office equipment division and considered it a component of the company. On September 1, 2011, the division’s assets and product line were sold for $2,100,000 cash, resulting in a gain of $640,000.
The company’s textiles division had six manufacturing plants that produced a variety of textile products. In April 2011, the company sold one of these plants and realized a gain of $130,000. After the sale, the operations at the plant that was sold were transferred to the remaining five textile plants, which the company continued to operate
In August 2011, the main warehouse of the food products division, located on the banks of the Bayer River, was flooded when the river overflowed. The resulting damage of $420,000 is not included in the financial data given previously. Historical records indicate that the Bayer River normally overflows every 4 to 5 years, causing flood damage to adjacent property.
For the 2 years ended December 31, 2011 and 2010, the company had interest revenue earned on investments of $70,000 and $40,000, respectively.
The provision for income tax expense for each of the 2 years should be computed at a rate of 40%.
Required
Prepare in proper form a multiple-step comparative statement of income of the Century Company for the 2 years ended December 31, 2011 and December 31, 2010. Earnings per share information and footnotes are not required.
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