Exercise 4-5 Income statement presentation [LO4-1, 4-5] The following incorrect
ID: 2397133 • Letter: E
Question
Exercise 4-5 Income statement presentation [LO4-1, 4-5] The following incorrect income statement was prepared by the accountant of the Axel Corporation: AXEL CORPORATION Income Statement For the Year Ended December 31, 2018
Revenues and gains:
Sales $ 592,000
Interest and dividends 32,000
Gain on sale of investments 86,000
Total revenues and gains 710,000
Expenses and losses:
Cost of goods sold $ 325,000
Selling expenses 67,000
Administrative expenses 87,000
Interest 26,000
Restructuring costs 55,000
Income taxes 60,000
Total expenses and losses 620,000
Net Income $ 90,000
Earnings per share $ 0.90
Required: Prepare a multiple-step income statement for 2018 applying generally accepted accounting principles. The income tax rate is 40%. (Amounts to be deducted should be indicated with a minus sign. Round EPS answer to 2 decimal places.)
Explanation / Answer
Multiple step income statement :
Sales 592000 Less: Cost of goods sold -325000 Gross profit 267000 Less: Operating expense Selling expense -67000 Administrative expense -87000 Restructuring costs -55000 Total operating expense -209000 Operating income 58000 Other revenue Interest and dividend 32000 Gain on sale of investment 86000 Other expense Interest expense -26000 92000 Income before tax 150000 Income tax -60000 Net income 90000 EPS 0.90Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.