Rembrandt Paint Company had the following income statement items for the year en
ID: 2411029 • Letter: R
Question
Rembrandt Paint Company had the following income statement items for the year ended December 31, 2016 ($ in 000s): Net sales $ 31,000 Cost of goods sold $ 17,000 Interest income 330 Selling and administrative expenses 3,800 Interest expense 610 Restructuring costs 2,100 In addition, during the year the company completed the disposal of its plastics business and incurred a loss from operations of $2.9 million and a gain on disposal of the component’s assets of $4.6 million. 600,000 shares of common stock were outstanding throughout 2016. Income tax expense has not yet been recorded. The income tax rate is 40% on all items of income (loss). Required: Prepare a multiple-step income statement for 2016, including EPS disclosures. (Amounts to be deducted should be indicated with a minus sign. Enter your answers in thousands except earnings per share. Round EPS answers to 2 decimal places.)
Explanation / Answer
Rembrandt Paint Company
Multiple step Income Statement
For the year ended December 31, 2016 ($'000)
EPS = Net income/Number of shares
= 5,712,000/600,000
= $9.52
Sales 31,000 Less: Cost of goods sold -17,000 Gross profit 14,000 Operating expenses: Selling and administrative expenses - 3,800 Total operating expenses - 3,800 Operating income 10,200 Other incomes and expenses : Interest income 330 Interest expense - 610 Restructuring costs -2,100 Loss on disposal of plastic business -2,900 Gain on disposal of component's assets 4,600 Income before tax 9,520 Income tax @ 40% - 3,808 Net income 5,712