Question

Rembrandt Paint Company had the following income statement items for the year ended December 31, 2021 ($ in thousands): Sales revenue Interest revenue Interest expense $30,000 cost of goods sold 340 Selling and administrative expense 540 Restructuring costs $ 16,500 3,700 2,000 In addition, during the year the company completed the disposal of its plastics business and incurred a loss from operations of $2.8 million and a gain on disposal of the component's assets of $4.4 million. 600,000 shares of common stock were outstanding throughout 2021. Income tax expense has not yet been recorded. The income tax rate is 25% on all items of income (loss). Required: Prepare a multiple-step income statement for 2021, including EPS disclosures. (Amounts to be deducted should be indicated with a minus sign. Enter your answers in thousands except earnings per share. Round EPS answers to 2 decimal places.)

Answer 1

REMBRANDT PAINT COMPANY Income Statement For the Year ended December 31, 2021 (S in Thousands, except per share amounts) Sales revenue 30,000 Cost of goods sold Gross profit Operating Expenses: Selling and administrative expenses Restructuring Costs Total Operating Expenses Operating Income Other Income (Expense): Interest Expense Interest Revenue Other income, net Income from continuing operations before income tax Income tax 16,500 13,500 (3,700) (2,000) (5,700) 7,800 (540) 340 (200) 7,600 (1,900) Income from continuing operations 5,700 %24

Discontinued operations (2,100) Loss on operations, net of tax Gain on disposal, net of tax Income on Discontinued operations Net Inocme Earnings per share Income from continuing operations Income on Discontinued operations Net Income 3,300 1,200 6,900 9.50 2.00 11.50 Notes: Loss on operations, net of tax = $2,800-($2.800*25%) = $2,100 Gain on disposal, net of tax =$4,400-(S4,400*25%) = $3,300 Earnings per share Income from Continuing operations = $5,700/600 = $9.5 Income on Discontinued Operations = $1,200/600 = $2 %3D %3D %3D