Question

Current Attempt in Progress The following balances were taken from the books of Sheridan Corp. on December 31, 2020. Interest revenue $87,300 Accumulated depreciation-equipment $41,300 Cash 52,300 Accumulated depreciation-buildings 29,300 156,300 Sales revenue Notes receivable 1,381,300 151,300 Accounts receivable Selling expenses 195,300 Prepaid insurance 21,300 Accounts payable 171,300 Sales returns and allowances 151,300 Bonds payable 101,300 Allowance for doubtful accounts Administrative and general expenses 98,300 8,300 46,300 Sales discounts Accrued liabilities 33,300 Land 101,300 Interest expense 61,300 Equipment 201,300 Notes payable 101,300 Buildings 141,300 Loss from earthquake damage 151,300 501,300 Cost of goods sold 622,300 Common stock Retained earnings 22,300 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

SHERIDAN CORP.
Income Statement
For the Year Ended December, 31, 2020
	$	$
Sales
Sales revenue	1,381,300.00
Less: Sales Discounts	46,300.00
Less: Sales returns and allowances	151,300.00
Net Sales		1,183,700.00
Cost of goods sold		622,300.00
Gross Profit		561,400.00
Operating Expenses
Selling Expense	195,300.00
Administrative & General Expenses	98,300.00
Total operating expenses		293,600.00
Income from Operations		267,800.00
Other Revenues and Gains
Interest revenue		87,300.00
		355,100.00
Other expenses and losses
Interest Expense		61,300.00
Income before taxes and extraordinary item		293,800.00
Income taxes (20%)		58,760.00
Income before extraordinary item		235,040.00
Extraordinary item:
Loss from earthquake damage		121,040.00
($151,300*1-.0.20) (Net of tax)
Net Income		114,000.00
Earnings per Common Share		$          1.14
($114,000 / 100,000 shares)