Question

--/1 Question 1 View Policies Current Attempt in Progress The following balances were taken from the books of Windsor Corp. on December 31, 2020. Interest revenue $87,350 Accumulated depreciation equipment $41,350 Cash 52,350 Accumulated depreciation-buildings 29,350 Sales revenue 1,381,350 Notes receivable 156,350 Accounts receivable 151,350 Selling expenses 195,350 Prepaid insurance 21,350 Accounts payable 171,350 Sales returns and allowances 151,350 Bonds payable 101,350 Allowance for doubtful accounts 8,350 Administrative and general expenses 98,350 Sales discounts 46,350 Accrued liabilities 33,350 Land 101,350 Interest expense 61,350 Equipment 201,350 Notes payable 101,350 Buildings 141,350 Loss from earthquake damage Cost of goods sold 622,350 Common stock 151,350 501,350 22,350 Retained earnings Assume the total effective tax rate on all items is 20%. Prepare a multiple-step income statement; 100,000 shares of common stock were outstanding during the year. (Round earnings per share to 2 decimal places, e.g. 1.48.)

Answer 1

WINDSOR CORP.
Income Statement
December 31, 2020
Revenues
Sales revenue		1,381,350
Less:
Sales return and allowance	-151,350
Sales discount	-46,350
		-197,700
Net Sales		1,183,650
Cost of goods sold		-622,350
Gross profit		561,300
Operating expenses:
Selling expenses	-195,350
Administrative and General expenses	-98,350
Total Operating expenses		-293,700
Operating Profit		267,600
Other revenues:
Interest revenue	87,350
Other expenses:
Interest expense	-61,350
Loss from earthquake	-151,350
		-125,350
Profit before tax		142,250
Income tax expense ( Profit before tax tax x Income tax rate) ( 142,250 x 20%)		-28,450
Net Income		$113,800
Earning per share ( Net Income / Number of common shares) ( 113,800/100,000)		1.14

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