The following incorrect income statement was prepared
by the accountant of the AXL Corporation:
AXL CORPORATION |
|||||
Revenues and gains: |
|||||
Sales revenue |
$ |
600,000 |
|||
Interest revenue |
33,000 |
||||
Gain on sale of investments |
80,000 |
||||
Total revenues and gains |
713,000 |
||||
Expenses and losses: |
|||||
Cost of goods sold |
$ |
330,000 |
|||
Selling expense |
60,000 |
||||
Administrative expense |
80,000 |
||||
Interest expense |
17,000 |
||||
Restructuring costs |
56,000 |
||||
Income tax expense |
42,500 |
||||
Total expenses and losses |
585,500 |
||||
Net Income |
$ |
127,500 |
|||
Earnings per share |
$ |
1.28 |
|||
Required:
Prepare a multiple-step income statement for 2021 applying
generally accepted accounting principles. The income tax rate is
25%. (Amounts to be deducted should be indicated with a
minus sign. Round EPS answer to 2 decimal places.)
Solution
On the basis of the available information, the income statement shall be as follows,
AXL Corporation | ||
Multi-Step Income Statement | ||
For the year ended on December 31, 2021 | ||
Particulars | Amount ($) | Amount ($) |
Sales Revenue | 6,00,000.00 | |
Less: Cost of Goods Sold | -3,30,000.00 | |
Gross Profit | 2,70,000.00 | |
Less: Operating Expenses | ||
- Selling Expenses | 60,000.00 | |
- Administrative Expenses | 80,000.00 | -1,40,000.00 |
Operating Income | 1,30,000.00 | |
Non-Opearting Income: | ||
Interest Revenue | 33,000.00 | |
Gain on Sale of Investments | 80,000.00 | |
Less: Interest Expenses | -17,000.00 | |
Less: Reconstruction Expenses | -56,000.00 | 40,000.00 |
Income before taxes | 1,70,000.00 | |
Less: Taxes @25% | -42,500.00 | |
Net Income | 1,27,500.00 | |
The following incorrect income statement was prepared by the accountant of the AXL Corporation: AXL CORPORATION...
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