Question

Prepare an income statement for Franklin Kite Co. Take your calculations all the way to computing earnings per share. (Round EPS answer to 2 decimal places.)
  

Sales	$	1,570,000
Shares outstanding		108,000
Cost of goods sold		970,000
Interest expense		20,000
Selling and administrative expense		47,000
Depreciation expense		30,000
Preferred stock dividends		87,000
Taxes		113,000
Income Statement $ $ $ $ Earning Available to common stockholders $________ Shares outstanding ___________ Earnings per share ___________

Answer 1

Solution:

Sales= 1570000

Less:

Cost of good sold= 970000

Gross profit= 600000

Less:

Selling and administrative expenses= 47000

Depreciation= 30000

Earning before interest and taxes (EBIT))= 523000

Less: Interest = 20000

Profit before tax = 503000

Less: Tax= 113000

Profit after tax= 390000

Preferred stock dividend= 87000

Earning Available to common stockholders= 303000

Shares Outstanding = 108000

Earning per share= 2.80 (Earning available to common stockholders/ shares outstanding)

Hence,

Earning Available to common stockholders= 303000

Shares Outstanding = 108000

Earning per share= 2.80