The following balances were taken from the books of Schimank Corp. on December 3

Question

The following balances were taken from the books of Schimank Corp. on December 31, 2014. Interest revenue $120,400 Sales 1,932,000 Selling expenses 271,600 Sales returns and allowances 210,000 Administrative and general expenses 133,800 Sales discounts 63,000 Interest expense 84,000 Loss from earthquake damage (unusual and infrequent stem pre-tax) 210,000 Cost of goods sold 869,400 Common stock 700,000 ***Assume the total effective tax rate on all items is 34%. Prepare a multiple-step income statement and EPS 100,000 shares of common stock were outstanding during the year. Show all key lines of the income statements example; Gross Profit.

Explanation / Answer

MULTI STATE INCOME STATEMENT Sales Revenue Total sale $1,932,000 Less Sales return $210,000 Less Sales discount $63,000 Net sales revenue $1,659,000 Less: cost of good sold $869,400 Gross Profit $789,600 Operating Expenses Selling expenses $271,600 Adminstrative & General Expenses $135,800 Total operating expenses $407,400 Operating Income $382,200 Other Income and Expenses Interest Revenue $120,400 Less: Interest Expenses $84,000 Less: Loss from earthquake $210,000 Net Other Income and Expenses ($173,600) Net Income $208,600 Common stock 100000 EPS=Income/ common stock $2.0860

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