Instructions for the Microsoft Excel Templates

Be advised, the worksheet and workbooks are not protected.

Extensive detail and information is contained within the manual. Striking the "F1" key or following the path "Windows>Excel Help" will invoke the Office Assistant and bring up one of several help menus. You should enter your name, course ID, and date name into the cells at the top of the page. Each page contains a page footer with a Page # of Page ## as well as time and date to assist in assembly of multiple pages. Each worksheet contains the identification of the problem or exercise. All formatting should have been accomplished to provide satisfactory presentation. See the text for additional assistance in formatting. There should be no need to insert columns or rows into the workbooks. If more than one page is required by the problem, the page breaks are preset. In general, the yellow highlighted cells are the cells which work and effort should be presented. Place the proper account title in the cell where the word "Account title" appears on the template. Place the value in the cell where the word "Value" or "Amount" appears on the template. A formula may be placed in some of these cells. Write a formula into cells where the word "Formula" appears. In these cells, an amount calculated can be entered. An amount can be placed in these cells. Place the explanation for the entry in the cell where the word "Text Explanation" appears on the template. Insert the account number where "Acct Nbr" appears on the template during posting. Insert the journal reference where "JOURN #" appears on the template during posting. Insert the title in the cell where "TITLE" appears on the template. The print area is defined to fit onto 8 1/2" X 11" sheets in portrait or landscape mode as required. The gray filled cells define the perimeter of the problem and the print area. The problem is formatted for whole dollars with comma separations (no cents) except where required. The display may have "Freeze Pane" invoked so column titles remain visible during data entry. Negative values may be shown as ($400) or -$400.

Consider using "Split" panes to assist in copy and paste of data. Much of the exercises and problems can have data entered by the "look to" or "=A34" type formula where cell A34 contains the data to be entered. This precludes typing and data entry errors.

Name: Problem: Course: Date:

P4-3, Irregular Items

Maher Inc. reported income from continuing operations before taxes during 2010 of $790,000 Additional transactions occurring in 2010 but not considered in the $790,000 are as follows: 1. The corporation experienced an uninsured flood loss (extraordinary) in the amount of $90,000 during the year. The tax rate on this item is 46% 2. At the beginning of 2008, the corporation purchased a machine for $54,000 salvage value of $9,000 that had a useful life of 6 years. The bookkeeper used straight-line depreciation for 2008, 2009, and 2010 but failed to deduct the salvage value in computing the depreciation base. 3. Sale of securities held as part of its portfolio resulted in a loss of $57,000 (pretax). 4. When its president died, the corporation realized $150,000 from an insurance policy. The cash surrender value of the policy had been carried on the books as an investment in the amount of $46,000 (the gain is nontaxable). 5. The corporation disposed of its recreational division at a loss of $115,000 before taxes. Assume that this transaction meets the criteria for discontinued operations. 6. The corporation decided to change its method of inventory pricing from average cost to the FIFO method. The effect of this change on prior years is to increase 2008 income by $60,000 and decrease 2009 income by $20,000 before taxes. The FIFO method has been used for 2010. The tax rate on these items is 40% Instructions: Prepare an income statement for the year 2010 starting with income from continuing operations before taxes. Compute earnings per share as it should be shown on the face of the income statement. Common shares outstanding for the year are 120,000 shares. (Assume a tax rate of 30% on all items, unless indicated otherwise.) MAHER INC. Income Statement (Partial) For the Year Ended December 31, 2010 Income from continuing operations before taxes Title Title Discontinued operations: Title Amount Title Formula Income before extraordinary item Extraordinary item: Title Amount Title Formula Title

Amount Amount Formula

Formula Formula

Formula Formula

Problem 4-3, Page 3 of 4, 4/12/2012, 7:50 PM

Per share of common stock: Income from continuing operations Title Title Title Net income per share Computation of income from continuous operations before taxes: As previously stated Title Gain on proceeds of life insurance policy Error in computation of depreciation As computed Corrected As restated Computation of income tax: Income from continuing operations before taxes Nontaxable income (gain on life insurance) Title Title Income tax expense

Formula Formula Formula Formula Formula

Amount Amount Amount

Formula Formula

Formula Formula

Amount Formula Formula Amount Formula

Problem 4-3, Page 4 of 4, 4/12/2012, 7:50 PM