The following incorrect income statement was prepared by the accountant of the A

Question

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: $710,0060 Sales Interest and dividends Gain on sale of investments 44,000 91,000 845,000 Total revenues and gains Expenses and losses: Cost of goods sold Selling expenses Administrative expenses Interest Restructuring costs Income taxe $385,0060 71,000 91,000 38,000 67,000 77,200 Total expenses and losses 729,200 $115,800 $1.16 Net Income Earnings per share 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

AXEL CORPORATION multi Income Statement For the year ended December 31, 2018 Sales Revenue Sales $ 710,000 Cost of goods sold $ 385,000 Gross Profit $ 325,000 Operating Expenses Selling expense $   71,000 Administrative expense $   91,000 Total Operating expenses $ 162,000 Income from operations $ 163,000 Non operating income and (expenses) Interest and dividend $   44,000 Interest expense $ (38,000) Gain on sale of investment $   91,000 Restructuring cost $ (67,000) Total Non operating income and expenses $    30,000 Income before income taxes $ 193,000 Income taxes $    77,200 Net Income $ 115,800 Earning per common share $         1.16

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