Presented is information related to Capital Co. for year of 2015 Income from ope
ID: 2493162 • Letter: P
Question
Presented is information related to Capital Co. for year of 2015
Income from operations of discontinued food department $60,000
Selling and administrative expenses 640,000
Interest expenses 140,000
Net Sales 3,560,000
Loss resulting from changes in accounting principles: LIFO to average cost (pre-tax) 37,000
Dividends-Common stock 56,000
Gain resulting from correction of computation error on saleries expense in 2013 (pre-tax) 69,000
Interest revenues 260,000
Loss on disposal of discontinued food department (pre-tax) 170,000
Cost of goods sold 2,380,000
Dividends-Preferred stock 40,000
Prepare in good form a multiple-step income statement for the year 2015. Assume a 30% tax rate and that 300,0000 shares of common stock were outstanding durning the year. All subtotals should be titled properly. Also determine earnings per share based on the net income figure at ethe bottom of the statement round to two decimals.
Explanation / Answer
Multi Step Income Statement of Capital Co.
Particulars $ Net Sales 3,560,000 Less: Cost of good sold (2,380,000) Gross Profit 1,180,000 Operating Expenses Selling and administrative expenses (640,000) Operating Profit 540,000 Non operating Incomes and expenses Interest Revenue 260,000 Gain from correction of salaries expenses 69,000 Income from discontinued food department 60,000 Loss on disposal of discontinued food department (170,000) Loss from change from LIFO to average cost (37,000) Interest expenses (140,000) Net Income (Before Tax) 582,000 Less: Tax (30%) (174,600) Net Income (After Tax) 407,400 Less: Preference dividend (40,000) Earnings available to Equity shareholders 367,400 Earnings Per Share ( $367,400/300,000) 1.2247Related Questions
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