Question

Rembrandt Paint Company had the following income statement items for the year ended December 31, 2018 ($ in 000s): Net sales $ 21,000 Cost of goods sold $ 12,000 Interest income 230 Selling and administrative expenses 2,800 Interest expense 410 Restructuring costs 1,100 In addition, during the year the company completed the disposal of its plastics business and incurred a loss from operations of $1.9 million and a gain on disposal of the component’s assets of $2.6 million. 600,000 shares of common stock were outstanding throughout 2018. Income tax expense has not yet been recorded. The income tax rate is 40% on all items of income (loss). Required: Prepare a multiple-step income statement for 2018, including EPS disclosures. (Any amounts to be deducted, including expenses, should be indicated with a minus sign. Enter your answers in thousands except earnings per share. Round EPS answers to 2 decimal places.)

Answer 1

Rembrandt Paint Company
Income Statement for Year ended 31st December 2018
Particulars	$ in 000's
Net Sales	21000
Less: Cost of Goods Sold	-12000
Gross Profit	9000
Less: Selling & Administrative expenses	-2800
Operating Income	6200
Non-operating income/(expense)
Interest income	230
Interest Expense	410
Restructuring costs	-1100
Loss from plastics business	-1900
Gain from components business	2600
Net Income	6440
Less: Tax @ 40%	-2576
Profit after tax……….(i)	3864
Common shares outstanding………..(ii)	600
EPS……….[(i)/(ii)]	6.44