Question

Question 2 of 6 < 1/2 s View Policies Show Attempt History Current Attempt in Progress Two accountants for the firm of Elves and Wright are arguing about the merits of presenting an income statement in a multiple-step versus a single-step format. The discussion involves the following 2020 information related to Vaughn Company ($000 omitted). Administrative expense Officers' salaries $5.039 Depreciation of office furniture and equipment 4,099 Cost of goods sold 60,709 Rent revenue 17,369 Selling expense Delivery expense 2.829 Sales commissions 8.119 Depreciation of sales equipment 6,619 Sales revenue Income tax Interest expense 1.999 96 639 9.209 Common shares outstanding for 2020 total 38.465 000 omitted) (a)

Answer 1

Answer

Earnings per share = income available to common share holders / weighted average number of common shares outstanding

Earnings per share (EPS) = 15,386 / 38,465 = $0.4

Below are the detailed presentation of multi step income statement in 2020 of Vaughn company.

Vaughn Company

   Income statement

      For the Year Ended December 31st, 2020 (in $000)

Particulars	$	$
Revenue:
Sales revenue		96,639
Less Cost of goods sold		60,709
Gross profit		35,930
Operating expenses
Selling expenses:
Sales commissions	8,119
Depreciation of sales equipment	6,619
Delivery expense	2,829
Total selling expenses	17,567
Administrative expenses:
Depreciation of office furniture and equipment	4,099
Officer's salaries	5,039
Total administrative expenses	9,138
Less total operating expenses		26,705
Operating profit		9,225
Non operating income and expenses
Rent revenue	17,369
Interest expense	(1,999)
Total non operating income and expenses		15,370
Income before income tax		24,595
Less income tax expense		9,209
Net income		15,386
Earnings per share		$0.4