SECTION B PROBLEM QUESTIONS 1. Denver Corporation\'s capital structure consists

Question

SECTION B PROBLEM QUESTIONS 1. Denver Corporation's capital structure consists of 20,000 shares of common stock and 60,000 shares of preferred stock. At December 31, 2017 an analysis of the accounts and discussions with company officials revealed the following information: Sales revenue Discontinued operations loss (net of tax) Selling expenses Cash Preferred stock Common stock Cost of goods sold Accumulated depreciation-machinery Dividend revenue Unearned service revenue Interest payable Interest expense Administrative expenses Dividends dedared on preferred stock Allowance for doubtful accounts Accounts payable $2,500,000 124,000 210,000 60,000 120,000 200,000 900,000 80,000 6,000 3,200 2,000 15,000 140,000 12,000 4,000 38,000 The federal income tax rate is 35%. Instructions Prepare a multiple-step income statement. Present Earnings Per Share (EPS) below the income statement

Explanation / Answer

income statement $ sales revenue 2500000 less C.O.G.S 900000 GROSS PROFIT 1600000 Operating expenses less selling expenses 210000 less administrative expenses 140000 total operating expenses 350000 income from operations 1250000 other revenue and gains less devided revenue 6000 other expenses and losses less intrest expenses -15000 -9000 income before income tax 1241000 less income tax 434350 net income from continues opertions 806650 less discontinued operation loss 124000 net income 682650 less prefered stock dividend 12000 income available for common stock holders 670650 COMMON STOCK 20000 EPS 33.5325 income available for common stock holders/COMMON STOCK ..

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