Question

Presented below is information related to Metlock Corp. for the year 2020. Net sales $1,274,000 Write-off of inventory due to obsolescence $78,400 Cost of goods sold 764,400 Depreciation expense omitted by accident in 2019 53,900 Selling expenses 63,700 Casualty loss 49,000 Administrative expenses 47,040 Cash dividends declared 44,100 Dividend revenue 19,600 Retained earnings at December 31, 2019 960,400 Interest revenue 6,860 Effective tax rate of 20% on all items

Prepare a multiple-step income statement for 2020. Assume that 59,584 shares of common stock are outstanding for the entire year. (Round earnings per share to 2 decimal places, e.g. 1.49.)

Answer 1

Ans:

a multiple-step income statement for 2020

Particulars	Amount($)	Amount($)
Sales Revenue:
Net sales	1,274,000
Less: cost of goods sold	-764,400
Gross profit sales[A]		509,600
Operating Expenses:
Selling Expenses	63,700
Admin Expenses	47,040
Total Operating Expenses [B]		110,740
Income from Operations [A - C]=C		398,860
Other Revenue and Gains
Dividend Revenue	19,600
Interest Revenue	6,860
Total other revenues and gains[D]		26,460
Other Expenses and Losses :
Write-off of Inventory Due to Obsolescence	78,400
Casualty loss	49,000
Total Other Expenses and Losses[E]		127,400
Income before income tax[C + D -E]=F		297,920
Less: Income tax 20%[G]		59,584
Net Income[F - G]		238,336
Number of shares outstanding		59,584
Earnings per share		4