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In: Accounting

The Superstar Corporation, one of US merchandisers (Non-publicly Corporation), Provides merchandising goods for specific customers. The...

The Superstar Corporation, one of US merchandisers (Non-publicly Corporation), Provides merchandising goods for specific customers. The company’s fiscal year ends on December 31. For the year ended December 31, 2019, the company collected $1,300,000 from regular customers and paid out $650,000 for various operating expenses (not including income taxes and restructuring costs). The following information also is available.

Partial balance sheet information:

12/31/19 12/31/18

Accounting receivable 120,000 95,000

Accounts payable (for operating expenses) 50,000 65,000

Unearned Revenue                             180,000            150,000

Additional facts:

  1. Partial Information selected from “inventory-Finished Goods”

Beginning Balance:       1500@$200

Current purchase: Jan 15    500@ $150

               Mar 30   200@ $250

               June15   500@$ 210

               Oct 15   200@$ 250

Current sales:    Feb 28   1200 units

               May 1    600 units

                

The business always take the Perpetual Inventory System, Weighted-Average cost flow assumption. No remeasuring for ending inventory.

  1. Depreciation expense for 2019 totaled $70,000;
  2. There were no bad debt write offs during the year.
  3. During the year, the company incurred a loss of $100,000 from hurricane damage to one of its buildings. The loss is material and the event is considered to be unusual, but frequent.
  4. Oct 1, 2019, the board of director of Superstar declared closing a division and related 120 employees will be laid off after 4 months. There has a terminating compensation required minimum 2 year retention period. Also, Average $20,000 each one will be compensated for meeting this requirement. Only 2/3 of total employees of this division reach this standard.
  5. The company bank interest totaled $50,000 and bond interest expense incurred $20,000.

The company’s income tax rate is 30% on all items of income or loss.

Required: (Show all computations)

Prepare a multiple-step, accrual-based income statement for 2019.

Solutions

Expert Solution

ekkarill92 answered 1 year ago
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