From the following information, construct a simple income statement and a balanc

Question

From the following information, construct a simple income statement and a balance sheet:

Round your answer for earnings per share to the nearest cent.

Sales $900,000 Finished goods 190,000 Long-term debt 400,000 Raw materials 140,000 Cash 75,000 Cost of goods sold 480,000 Accounts receivable 170,000 Plant and equipment 490,000 Interest expense 50,000 Number of shares outstanding 110,000 Earnings before taxes 240,000 Taxes 100,000 Accounts payable 200,000 Other current liabilities 40,000 Other expenses 130,000 Equity 425,000

Explanation / Answer

Corporation X

Income Statement

for the Year Ended ...............

*EPS = Net Income/no. of shares outstanding = 140,000/110,000 = 1.27

Corporation X

Balance sheet

as on ...............

Sales           900,000 Less: Cost of goods sold           480,000 Gross profit           420,000 Less: other expenses           130,000 EBIT           290,000 Less: Interest             50,000 Income Before Income Tax (EBT)           240,000 Less: Income Tax           100,000 Net Income           140,000 no. of shares outstanding           110,000 EPS *                  1.27

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