P 4-4 page 180-181 The following items are from Taperline Corporation on Decembe
ID: 2543279 • Letter: P
Question
P 4-4 page 180-181
The following items are from Taperline Corporation on December 31, 2012. Assume a flat 40% corporate tax rate on all items,
including the casualty loss.
Sales $670,000
Rental income 3,600
Sales
$670,000
Rental income
$3,600
Gain on the sale of fixed assets
$3,000
General and administrative expenses
$110,000
Selling expenses
$97,000
Interest expense
$1,900
Depreciation for the period
$10,000
Extraordinary item (casualty loss-pretax)
$30,000
Cost of sales
$300,000
Common stock (30,000 shares outstanding)
$150,000
Required:
a. Prepare a single-step income statement for the year ended December 31, 2012. Include earnings per share for earnings before extraordinary items and net income.
b. Prepare a multiple-step income statement. Include earnings per share for earnings before extraordinary items and net income.
Sales
$670,000
Rental income
$3,600
Gain on the sale of fixed assets
$3,000
General and administrative expenses
$110,000
Selling expenses
$97,000
Interest expense
$1,900
Depreciation for the period
$10,000
Extraordinary item (casualty loss-pretax)
$30,000
Cost of sales
$300,000
Common stock (30,000 shares outstanding)
$150,000
Explanation / Answer
SINGLE STEP INCOME STATEMENT Amount Revenue and Gains Sales $ 6,70,000 Rental income $ 3,600 Gain on sale of Fixed Assets $ 3,000 Total Revenue and Gains(A) $ 6,76,600 Less: Expenses and Losses Cost of Sales $ 3,00,000 General and administration expenses $ 1,10,000 Selling expenses $ 97,000 interest Expenses $ 1,900 Depreciation for the period $ 10,000 Extraordinary item (Casulaty Loss) $ 30,000 Total of Expesnes and losses(B) $ 5,48,900 Net Income (A-B) $ 1,27,700 Add/Less Extrordinary items Rental income $ -3,600 Gain on sale of Fixed Assets $ -3,000 Extraordinary item (Casulaty Loss) $ 30,000 Total $ 23,400 Net income before extraordinary item (C) $ 1,51,100 Number of shares outstanding = (D) 30,000 Shares Earning Per shares = (C / D) $ 5.04 Per shares MULTI STEP INCOME STATEMENT Amount Amount Sales Revenue $ 6,70,000 Less: Cost of Goods Sold $ 3,00,000 Gross Margin $ 3,70,000 Less: Operating Expenses Selling expenses $ 97,000 interest Expenses $ 1,900 Depreciation for the period $ 10,000 General and administration expenses $ 1,10,000 Total Operating Expenses $ 2,18,900 Operating Income $ 1,51,100 Non-Operating and others Rental income $ 3,600 Gain on sale of Fixed Assets $ 3,000 Extraordinary item (Casulaty Loss) $ -30,000 $ -23,400 Net Income $ 1,27,700 Number of shares outstanding = 30,000 Shares Earning Per shares = Operaing income / 30,000 shares $ 5.04 Per shares
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.