Problem 2 The accountant of Tabel Shoe Co. has compiled the following informatio

Question

Problem 2 The accountant of Tabel Shoe Co. has compiled the following information from the company's records as a basis for an income statement for the year ended December 31, 2017 2 Rental revenue Interest on notes payable Market appreciation on land above cost Wages and salaries-sales Materials and supplies-sales Income tax Wages and salaries-administrative Other administrative expenses Cost of goods sold Net sales Depreciation on plant assets (70% selling, 30% administrative) Dividends declared $87,000 54,000 93,000 344,400 52,800 112,200 407,700 155,100 1,488,000 2,940,000 195,000 4 48,000 There were 20,000 shares of common stock outstanding during the year. nstructions: o Prepre a multipl step income statement. (lo) prepare a sirga-Step i

Explanation / Answer

Answer a. TABEL SHOE CO. Multiple Step Income Statement For the Year Ended Dec 31, 2017 Net Sales    2,940,000.00 Cost of Goods Sold    1,488,000.00 Gross Margin    1,452,000.00 Operating Expenses Selling Expenses Wages & Salaries    344,400.00 Materials & Supplies      52,800.00 Depreciation on Plant Assets - $195,000 X 70%    136,500.00    533,700.00 Administrative Expenses Wages & Salaries    407,700.00 Depreciation on Plant Assets - $195,000 X 30%      58,500.00 Other Adminstrative Expenses    155,100.00    621,300.00    1,155,000.00 Operating Income        297,000.00 Other Revenues and Gains Rental Revenue          87,000.00        384,000.00 Other Expenses & Losses Interest on Notes Payable          54,000.00 Net Income Before Tax        330,000.00 Income Tax        112,200.00 Net Income        217,800.00 Earning Per Share - $217,800 / 20,000 Shares                  10.89 Answer b. TABEL SHOE CO. Single Step Income Statement For the Year Ended Dec 31, 2017 Revenue Net Sales    2,940,000.00 Rental Revenue          87,000.00 Total Revenue    3,027,000.00 Expenses Cost of Goods Sold    1,488,000.00 Selling Expenses        533,700.00 Administrative Expenses        621,300.00 Interest on Notes Payable          54,000.00 Total Expenses    2,697,000.00 Net Income Before Tax        330,000.00 Income Tax        112,200.00 Net Income        217,800.00 Earning Per Share - $217,800 / 20,000 Shares                  10.89

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