Question

The following is a partial trial balance for General Lighting Corporation as of December 31, 2018: 2,758,8ee 88,000 Loss on sale of investments Cost of goods sold Loss from write-down of inventory due to obsolescence Selling expenses General and administrative expenses 26,500 1,270,ee6e 280 , еее 380,ee0 19e,0e0 87,800 300,000 shares of common stock were outstanding throughout 2018. Income tax expense has not yet been recorded. The income tax rate is 40%. Required: 1. Prepare a single-step income statement for 2018, including EPS disclosures. 2. Prepare a multiple-step income statement for 2018, Including EPS disclosures.

Answer 1

Income Statement Single Step
Revenue and gain
Sales Revenue		2750000
Interest Revenue		88000
Total Revenue and Gain		2838000
Expenses and Losses
Cost of Goods sold	1270000
General Selling and Admin Expense	190000
Interest	87000
Selling Expense	380000
Loss on Sale of Investment	26500
Loss from Inventory write down	280000
Income Tax	241800
Total expenses and losses
Net Income		362700
Earnings per share: 362700/300000		1.21

Income Statement Multi step
Sales Revenue		2750000
Cost of Goods sold		1270000
Gross profit		1480000
Operating expenses:
General Selling and Admin Expense	190000
Selling Expense	380000
Loss from inventory write- down	280000
Total operating expenses		850000
Operating income		630000
Other income (expense):
Interest Revenue	88000
Interest expense	-87000
Loss on sale of investments	-26500
Total other income (expense), ne		-25500
Income before taxes		604500
Income tax expense		241800
Net income		362700
EPS
Earnings per share: 362700/300000		1.21