Question

Exercise 4-5 (Algo) Income statement presentation (LO4-1.4-5] The following incorrect income statement was prepared by the accountant of the Axel Corporation $660,000 86.000 705,000 AXEL CORPORATION Income Statement For the Year Ended Deceber 31, 2021 Revenues and gains: Sales revenue Interest revenue Gain on sale of investments Total revenues and gains Expenses and losses! Cost of good old $260.000 Balling expense 66.000 Administrative expense 86.000 Interest expense 23,000 Ratuting Costs 82.000 Income wax expense 49.000 Total exponer and loss 644.000 $141.000 Earnings per share Required: Prepare a multiple step income statement for 20 21 applying generally accepted accounting principles. The income tax rate is 25% (Amounts to be deducted should be Indicated with a minus sign. Round EPS answer to 2 decimal places.

Answer 1

Answer-

AXEL CORPORATION
INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31,2021
PARTICULARS	AMOUNT	AMOUNT
	$	$
Sales Revenue	660000
Less- Cost of goods sold	360000
Gross Profit		300000
Less- Operating Expenses
Selling expense	66000
Administrative expense	86000
Restructuring costs	62000
Total operating expenses		214000
Operating Income		86000
Other income (expense)
Gain on sale of investments	86000
Interest revenue	39000
Less- Interest expense	23000
Total other income, net		102000
Income before income taxes		188000
Less- Income taxes	188000*25%	47000
Net Income		141000
No. of outstanding shares (b)		100000
Earning per share (c=a/b)		1.41