Prepare a multiple-step income statement for year ended December 31, 2013 applyi
ID: 2423432 • Letter: P
Question
Prepare a multiple-step income statement for year ended December 31, 2013 applying generally accepted accounting principles. The income tax rate is 40%. The loss from the hurricane is both unusual and infrequent. There are 500,000 shares of common stock outstanding.
The following incorrect income statement was prepared by the accountant for Apex Computer Corporation Revenue and gains Sales revenue 3,400,000 Interest and dividends 35,000 Gain on sale of equipment 30,000 Total revenue and gains 3,465,000 Expenses and losses Cost of goods sold 2,250,000 Selling expense 150,000 Administrative expense 450,000 Interest expense 20,000 Restructuring costs 400,000 Loss from hurricane damage 300,000 Income tax benefit +42000 Total expenses and losses 3,528,000 Net income (63,000) Earnings per share (0.13)Explanation / Answer
earning per share = (0.196)
Particular Amount Amount Sales 3400000 gain on sale of asset 30000 Net sales 3430000 less cost of goods sold 2250000 Gross profit 1180000 selling expenses (150000) administrative expense (450000) other expense (interest expense) (20000) loss from hurricane damage (300000) restucturing cost (400000) (720000) income before tax (140000) (add) income tax benifit 42000 income after tax (98000)