Question

The following incorrect income statement was prepared by the accountant of the Axel Corporation:

AXEL CORPORATION Income Statement For the Year Ended December 31, 2021
Revenues and gains:
Sales revenue				$	680,000
Interest revenue					41,000
Gain on sale of investments					88,000
Total revenues and gains					809,000
Expenses and losses:
Cost of goods sold	$	370,000
Selling expense		68,000
Administrative expense		88,000
Interest expense		25,000
Restructuring costs		64,000
Income tax expense		48,500
Total expenses and losses					663,500
Net Income				$	145,500
Earnings per share				$	1.46

Prepare a multiple-step income statement for 2021 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.)
  

	AXEL CORPORATION Income Statement For the Year Ended December 31, 2021 Gross profit 0 Operating expenses: Total operating expenses 0 Operating income 0 Other income (expense): Total other income, net 0 Income before income taxes 0 Net income Earnings per share

Answer 1

Prepare a multiple-step income statement for 2021 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.)
  

AXEL CORPORATION Income Statement For the Year Ended December 31, 2021 Sales revenue 680000 Cost of goods sold 370000 Gross profit 310000 Operating expenses: Selling expense 68000 Administrative expense 88000 Restructuring cost 64000 Total operating expenses 220000 Operating income 90000 Other income (expense): Interest revenue 41000 gain on sale of investment 88000 Interest expense -25000 Total other income, net 104000 Income before income taxes 194000 Income tax 48500 Net income 145500 Earning per share 1.46