Question

The following is a partial trial balance for General Lighting Corporation as of December 31, 2021: Debits Credits 2,700,000 87,000 Account Title Sales revenue Interest revenue Loss on sale of investments Cost of goods sold Loss on inventory write-down (obsolescence) Selling expense General and administrative expense Interest expense 26,000 1,260,000 270,000 370,000 185,000 86,000 There were 300,000 shares of common stock outstanding throughout 2021. Income tax expense has not yet been recorded. The income tax rate is 25%. Required: 1. Prepare a single-step income statement for 2021, including EPS disclosures. 2. Prepare a multiple-step income statement for 2021, including EPS disclosures. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare a single-step income statement for 2021, including EPS disclosures. (Round EPS answer to 2 decimal places.) GENERAL LIGHTING CORPORATION Income Statement For the Year Ended December 31, 2021

Answer 1

Single step
GENERAL LIGHTING CORPORATION
Income statement
For the year ended December 31,2021
Revenue and gains:
Sales revenue	$    27,00,000
Interest revenue	$         87,000
Total revenue and Gains		$ 27,87,000
Expenses and losses:
Cost of goods sold	$    12,60,000
selling expenses	$      3,70,000
interest expenses	$         86,000
General and administrative expenses	$      1,85,000
loss on sale of investment	$         26,000
Loss on inventory written down	$      2,70,000
Income tax expenses (note)	$      1,47,500
Total expenses and losses		$ 23,44,500
Net income		$   4,42,500
Number of shares outstanding		300000
EPS		1.475
Multiple step
GENERAL LIGHTING CORPORATION
Income statement
For the year ended December 31,2021
Sales revenue	$    27,00,000
Less: Cost of goods sold	$ -12,60,000
Gross profit		$ 14,40,000
Operating expenses
selling expenses	$      3,70,000
General and administrative expenses	$      1,85,000
Loss on inventory written down	$      2,70,000
Total operating expenses		$   8,25,000
operating income		$   6,15,000
Other income/expenses
Interest revenue	$         87,000
Interest expenses	$       -86,000
Loss on sale of investment	$       -26,000
Total other income and expenses		$     -25,000
Income before tax		$   5,90,000
Income tax expenses		$   1,47,500
Net income		$   4,42,500
Number of shares outstanding		300000
EPS		1.475
Note
Income Tax expenses
Total revenue	$    27,87,000
Less:
Cost of goods sold	$ -12,60,000
selling expenses	$    -3,70,000
interest expenses	$       -86,000
General and administrative expenses	$    -1,85,000
loss on sale of investment	$       -26,000
Loss on inventory written down	$    -2,70,000
Income before tax	$           5,90,000
Income Tax expenses (25% of 590000)	$           1,47,500