Question

(Multiple-Step Statement) The following balances were taken from the books of Alonzo Corp. on December 31, 2017.                                                                                  

Interest revenue                            $ 86,000    Accumulated depreciation—equipment $ 40,000

Cash                                                 51,000   Accumulated depreciation—buildings    28,000

Sales revenue                              1,920,000    Notes receivable                                     155,000

Equity earnings                                30,000    loss from disposal of production lines      15,000

Accounts receivable                     150,000      Selling expenses                                     194,000

Prepaid insurance                           20,000      Accounts payable                                   170,000

Sales returns and allowances        150,000     Bonds payable                                        100,000

Allowance for doubtful accounts     7,000      Administrative and general expenses      97,000

Sales discounts                                 45,000    Accrued liabilities                                    32,000

Land                                                100,000   Interest expense                                        60,000

Equipment                                       200,000   Notes payable                                         100,000

Buildings                                       140,000     Loss from earthquake damage               150,000

Cost of goods sold                          621,000    Common stock                                       500,000

Retained earnings                              21,000   losses from employees strike                   25,000

Income from operations of discontinued production lines 60,000

Assume the total effective tax rate on all items is 34%.

Instructions

Prepare a multiple-step income statement; 100,000 shares of common stock were outstanding

Answer 1

с 1920000 195000 1725000 621000 1104000 А B 1 A Corp. 2 Income Statement 3 Sales 4 Sales revenue 5 Less: 6 Sales returns and allowances 150000 7 Sales discounts 45000 8 9 Net sales 10 Cost of goods sold 11 Gross profit 12 Operating expenses 13 Selling expense 194000 14 Administrative expenses 97000 15 16 Income from operations 17 Other revenues and gains 18 Interest revenue 19 20 Other expenses and losses 21 Loss from earthquake damage 22 Interest expense 23 Income before income tax 24 Income tax expense 25 Net income /(Loss) 26 Per share of common stock: 27 Earnings per common share 291000 813000 86000 899000 150000 60000 689000 234260 454740 4.55

A B с 1 A Corp. 2 Income Statement 3 Sales 4 Sales revenue 1920000 5 Less: 6 Sales returns and allowances 150000 7 Sales discounts 45000 8 =B6+B7 9 Net sales =C4-C8 10 Cost of goods sold 621000 11 Gross profit =C9-C10 12 Operating expenses 13 Selling expense 194000 14 Administrative expenses 97000 15 =B13+B14 16 Income from operations =C11-C15 17 Other revenues and gains 18 Interest revenue 86000 19 =C16+C18 20 Other expenses and losses 21 Loss from earthquake damage 150000 22 Interest expense 60000 23 Income before income tax =C19-C21-C22 24 Income tax expense =C23*34% 25 Net income /(Loss) =C23-C24 26 Per share of common stock: 27 Earnings per common share =C25/100000