Rembrandt Paint Company had the following income statement items for the year en
ID: 2474543 • Letter: R
Question
Rembrandt Paint Company had the following income statement items for the year ended December 31, 2013 ($ in 000s):
Net sales $ 28,000
Cost of goods sold $ 15,500
Interest income 300
Selling and administrative expenses 3,500
Interest expense 550
Restructuring costs 1,800
Extraordinary gain 4,000
In addition, during the year the company completed the disposal of its plastics business and incurred a loss from operations of $2.6 million and a gain on disposal of the component’s assets of $4.0 million. 700,000 shares of common stock were outstanding throughout 2013. Income tax expense has not yet been accrued. The income tax rate is 30% on all items of income (loss).
Required: Prepare a multiple-step income statement for 2013, 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 Co.
Income Statement for the year ended December 31, 2013
Operating expenses:
$ ( '000) $ (' 000) Net sales 28,000 Cost of goods sold 15,500 Gross profit 12,500Operating expenses:
Selling and administrative expenses 3,500 Restructuring costs 1,800 (5,300) Income from operations 7,200 Other income / expenses Interest income 300 Interest expense (550) (250) Extraordinary gain 4,000 Income from continuing operations 10,950 Income from discontinued operations 1,400 Income before income tax 12,350 Income tax expense 3,705 Net income 8,645 Number of shares outstanding 700,000 Earnings per share $ 12.35