Question

Use the following information to assist you in preparing a multiple-step income statement for DMG Corp. for the year ended December 31, 2020. All amounts are shown pre-tax. The income tax rate is 35%. The company has 200,000 shares of common stock outstanding, 135,100 22,500 30,000 3,432 1,180 Cost of Goods Sold Selling & Admin Expenses Preferred Dividends Interest Expense Rent Revenue Loss on operations of discontinued pharmaceutical segment Loss on sale of discontinued pharmaceutical segment Salary Expense Sales Revenue 34,500 22,000 26,800 301,700

Multi-Step Income statement including earnings per share.

Answer 1

DMG Corp.
Income Statement
At December 31, 2020
Sales revenue		301,700
Cost of goods sold		-135,100
Gross profit		166,600
Operating expenses:
Selling expenses	-22,500
Salary expense	-26,800
Total Operating expenses		-49,300
Operating Profit		117,300
Other revenues:
Rent revenue		1,180
Other expenses:
Interest expense		-3,432
Income before taxes		115,048
Income tax ( Income before taxes x tax rate, 115,048, x 35%)		-40,267
Income from continuing operations		74,781
Discontinued operations:
Loss on operations of discontinuation pharmaceutical segment net of taxes {34,500- (34,500 x 35%)}		-22,425
Loss on sale of discontinued pharmaceutical segment net of taxes {22,000- (22,000 x 35%)}		-14,300
Net Income		38,056
Earning per share { ( Net Income-preferred dividend( / Number of common shares) {( 38,056-30,000)/200,000)		$0.04

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