Question

Presented below is information related to XYZ Corp at December 31, 2018

                  Cash                                                                                             $60,000

                  Sales revenue                                                                               775,000

                  Cost of goods sold                                                                       350,000

                  Selling and administrative expenses                                           125,000

                  Gain on sale of plant assets                                                           75,000

                  Unrealized gain on available-for-sale investments                       25,000

                  Interest expense                                                                             15,000

                  Loss on discontinued operations (net of income tax)                    30,000

                  Tax rate 20%

                  Common dividends declared and paid                                          12,000

                  Preferred dividends declared and paid                                          10,000

                  Weighted average common shares outstanding                          100,000

1a) Prepare a multi step income statement

1b) provide appropriate earnings per share information

Answer 1

Sales revenue		775000
Cost of goods sold		350000
Gross profit		425000
Selling and administrative expense		125000
Operating income		300000
Other income
Gain on sale of plant assets	75000
Other expense
Interest expense	-15000	60000
Income before tax		360000
Income tax		72000
Net income		288000
Discontinued operations
Loss on discontinued operations		-30000
Net income		258000

b) EPS = 258000/100000 = $2.58 per share