Question

Learning Objective 5 P13-43A Preparing an income statement The following information was taken from the records of Chua Motorsports, Inc. at November 30, 2018: Net Income $65,500 $ 110,000 Selling Expenses Common Stock, $12 Par Value, 10,000 shares authorized and issued $ 120,000 Administrative Expenses 115,000 Preferred Stock, $7 No-Par Value, 7,000 shares issued Income from Discontinued Operations 2,500 490,000 Cost of Goods Sold 510,000 Income Tax Expense: Continuing Operations 20,000 Treasury Stock-Common (5,000 shares) 75,000 Income Tax Expense: Income from Discontinued Operations Net Sales Revenue 819,000 1,000 Prepare a multi-step income statement for Chua Motorsports for the fiscal November 30, 2018. Include earnings per share. year ended

Answer 1

$819,000 $510,000 $309,000 [Net Sales Revenue - Cost of Goods Sold] Chua Motorsports, Inc. Multi-Step Income Statement For the year ended November 30, 2018 Net Sales Revenue Cost of Goods Sold Gross Profit Operating Expenses: Selling Expenses $110,000 Administrative Expenses $115,000 Total Operating Expenses Income Before Taxes Income Tax Expense Income (Loss) Before Extraordinary Items Income from Discontinued Operations (Net of Tax) Net Income (Loss) Less: Preferred Dividends Earnings Available to Equity Shareholders Number of Equity Shares issued and outstanding Earnings Per Share $225,000 $84,000 (Gross Profit - Total Operating Expenses] $20,000 $ 64,000 [Income Before Taxes - Income Tax Expense) $1,500 ($2,500 - $1,000] $65,500 [Income (Loss) Before Extraordinary Items + Income from Discontinued Operations (Net of Tax)] $49,000 (7,000 shares x $7] $16,500 5,000 (10,000 - 5,000 (Treasury Stock)] $3.30 ($16500 / 5000 shares)