Romney\'s Marketing Company has the following adjusted trial balance at Dec 31,

Question

Romney's Marketing Company has the following adjusted trial balance at Dec 31, 2012. No dividens were declare. However, 500 shares issued at the end of the year for $3,000 are included below:

Debit Credit

cash $1,500
Accounts Receivable 2,200
Interest receivable 100
prepaid Insurance 1,600
Notes receivable(long term) 2,800
Equipment 15,000
Accumulated depreciation $3,000
Accounts payable 2,400
Accrued expenses payable 3,920
Income tax payable 2,700
Unearned rent revenue 500
Contributed capital (800 shares) 3,700
Retained earnings 2,000
Sales revenue 37,650
Interest revenue 100
Rent revenue 750
Wages expense 19,000
Depreciation expense 1,800
Utilities Expense 320
Insurance Expense 700
Rent Expense 9,000
Income tax Expense 2,700

Total $56,720 $56,720

Prepare a multi-step Inxome staement in good form for 2012. Include earnings per share

Explanation / Answer

Calculation of multi-step income statement: Revenues: $ $ Sales revenue 37,650 Interest revenue 100 Rent revenue 750 Total revenues 38,500 Less: Expenses 19,000 wages expenses 1,800 Utilities expense 320 Insurance expense 700 Rent expense 9,000 Income tax Expenses 2,700 Total expenses 33,520 Net income: 4,980 EPS is Net income/No. of shares No. of shares 500 EPS: 4,980/500 9.96 Revenues: $ $ Sales revenue 37,650 Interest revenue 100 Rent revenue 750 Total revenues 38,500 Less: Expenses 19,000 wages expenses 1,800 Utilities expense 320 Insurance expense 700 Rent expense 9,000 Income tax Expenses 2,700 Total expenses 33,520 Net income: 4,980 EPS is Net income/No. of shares No. of shares 500 EPS: 4,980/500 9.96

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