Question

View Policies Show Attempt History Current Attempt in Progress The financial records of Marigold Inc. were destroyed by fire at the end of 2020. Fortunately, the controller had kept certain statistical related to the income statement as follows. 1. The beginning merchandise Inventory was $97,520 and decreased 20% during the current year. 2. Sales discounts amount to $15,300. 3. 21,812 shares of common stock were outstanding for the entire year. 4. Interest expense was $16,000. 5. The income tax rate is 30%. 6. Cost of goods sold amounts to $530,000. 7. Administrative expenses are 20% of cost of goods sold but only 8% of gross sales. 8. Four-fifths of the operating expenses relate to sales activities. From the foregoing information prepare an income statement for the year 2020 in single-step form. (Round earnings per share to places, e.g. 1.48.) MARIGOLD INC. Income Statement

Answer 1

MARIGOLD INC
Income statement
Gross sale			1325000
sale discount			-15300
net sale			1309700
cost of goods sold		530000
administrative expenses		106000
selling expenses		424000
interest expenses		16000
Total expenses			1076000
Income before tax			233700
Tax @ 30%			70110
net income			163590
earning per share			7.2
Working
gross sale = administrative expenses/8%
administrative expenses= 530000*20% = 106000
Gross sale = 106000/8% = 1325000
selling expenses = 106000*4 = 424000
Earning per share = 163590/21812 = 7.2

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