Question

The following is a partial trial balance for General Lighting Corporation as of December 31, 2021: Debits Credits 2,950,000 92,000 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 28,500 1,310,000 320,000 420,000 210,000 91,000 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 Revenues and gains: 0 Total revenues and gains Expenses and losses: 0 Total expenses and losses Income before income taxes 0 Net income Earnings per share

Answer 1

Answer :

1. Single Step Income statement :

General Lighting Corporation

Income Statement

For the Year Ended Dec 31, 2021

		Amount (in $)
Revenues and gains :
Sales revenue		2,950,000
Interest revenue		92,000
Total revenues and gains		3,042,000
Expenses and losses :
Loss on sale of investments	28,500
Cost of goods sold	1,310,000
Loss from write-down of inventory	320,000
Selling expense	420,000
General and administrative expenses	210,000
Interest expense	91,000
Total expenses and losses		2,379,500
Income before Income taxes		662,500
Income tax expense (662,500 x 25%)		(165,625)
Net Income		496,875
Earning per share (496,875 / 300,000 shares)		$1.66

2. Multi Step Income statement :

General Lighting Corporation

Income Statement

For the Year Ended Dec 31, 2021

		Amount (in $)
Sales revenue		2,950,000
Less : Cost of goods sold		1,310,000
Gross Profit		1,640,000
Operating expenses :
Loss from write-down of inventory	320,000
Selling expense	420,000
General and administrative expenses	210,000
Total Operating expenses		(950,000)
Operating Income		690,000
Other Income/(expense) :
Interest revenue	92,000
Interest expense	(91,000)
Loss on sale of investments	(28,500)
Total Other Income/(expense)		(27,500)
Income before Income taxes		662,500
Income tax expense (662,500 x 25%)		(165,625)
Net Income		496,875
Earning per share (496,875 / 300,000 shares)		$1.66