The following balances were taken from the books of Windsor Corp. on December 31

Question

The following balances were taken from the books of Windsor Corp. on December 31, 2017. Interest revenue Cash Sales revenue Accounts receivable Prepaid insurance Sales returns and allowances Allowance for doubtful accounts Sales discounts Land Equipment Buildings Cost of goods sold $87,900 Accumulated deprediation-equipment $41,900 52,900 Accumulated depreciation-buildings 29,900 1,381,900 Notes receivable 151,900 Selling expenses 156,900 195,900 21,900 Accounts payable 151,900 Bonds payable 171,900 101,900 98,900 33,900 61,900 101,900 151,900 501,900 22,900 8,900 Administrative and general expenses 46,900Accrued liabilities 101,900 Interest expense 201,900 Notes payable 141,900 Loss from earthquake damage 622,900 Common stock Retained earnings Assume the total effective tax rate on all items is 34%. Prepare a multiple-step income statement; 100,000 shares of common stock were outstanding during the year. (Round earnings per share to 2 decimal places, e.g 1.48.) WINDSOR CORP Income Statement xPalise1 .200 20 phn.wiley.A.Sans All Rights Reserved. A Division of 2ghn Wilex &SonsIns

Explanation / Answer

Ans. WINDSOR CORPORATION INCOME STATEMENT Particulars Amount Amount Sales revenue 1381900 less: sales returns and allowances -151900 less: sales discounts -46900 -198800 Net Sales Revenue 1183100 Less: Cost of goods sold -622900 Gross profit 560200 Less: Operating expenses: Selling expenses -195900 Administrative and general expenses -98900 -294800 Operating income (EBIT) 265400 Add: Interest revenue 87900 Less: Interest expenses -61900 Earning before taxes (EBT) and Extraordinary items 291400 Less: Taxes @34%   (291400*0.34) -99076 Income before Extraordinary items 192324 Less: Extraordinary loss (net of tax) Loss from earthquake damage [151900*(1-0.34)] -100254 Net Income 92070 Earning per share =   Net income / no. of shares outstanding 92070 / 100000 0.92

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