Question

The following balances were taken from the books of Skysong Corp. on December 31, 2020. Interest revenue Accumulated depreciation-equipment Accumulated depreciation-buildings Notes receivable $41,250 29,250 Cash Sales revenue 156,250 Accounts receivable 195,250 Prepaid insurance 171,250 $87,250 52.250 1,381,250 151,250 21,250 151,250 8,250 46,250 101,250 201,250 Sales returns and allowances 101,250 Allowance for doubtful accounts Selling expenses Accounts payable Bonds payable Administrative and general expenses Accrued liabilities Interest expense Notes payable 98,250 Sales discounts 33,250 Land 61.250 Equipment 101,250 Buildings Cost of goods sold 141,250 622,250 Loss from earthquake damage Common stock Retained earnings 151,250 501,250 22,250 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, eg. 1.48.) SKYSONG CORP. Income Statement For the Year Ended December 31, 2020 -

Answer 1

Answer
SKYSONG CORP.
Income Statement
December 31, 2020
Revenues
Sales revenue		$     1,381,250
Less:
Sales return and allowance	$     151,250
Sales discount	$       46,250
		$        197,500
Net Sales revenue		$     1,183,750
Cost of goods sold		$        622,250
Gross profit		$        561,500
Less -Operating expenses:
Selling expenses	$     195,250
Administrative and general expenses	$       98,250
Total Operating expenses		$        293,500
Operating Profit		$        268,000
Other revenues:
Interest revenue	$       87,250
Less- Other expenses and losses:
Interest expense	$       61,250
Loss from earthquake	$     151,250
		$        125,250
Profit before tax		$        142,750
Income tax expense ( Profit before tax x Tax rate) ( 142,750 x 20%)		$          28,550
Net Income		$        114,200
Earning per share ( Net Income/ Number of common shares outstanding) ( 114,200/100,000)		$              1.14