Question

The following is a partial trial balance for the Green Star Corporation as of December 31, 2016:

Account Title	Debits	Credits
Sales revenue		1,550,000
Interest revenue		38,000
Gain on sale of investments		58,000
Cost of goods sold	770,000
Selling expenses	200,000
General and administrative expenses	83,000
Interest expense	48,000
Income tax expense	138,000

110,000 shares of common stock were outstanding throughout 2016.

Required:
1.	Prepare a single-step income statement for 2016, including EPS disclosures. (Round EPS answer to 2 decimal places.)

110,000 shares of common stock were outstanding throughout 2016

2.	Prepare a multiple-step income statement for 2016, including EPS disclosures. (Amounts to be deducted should be indicated with a minus sign. Round EPS answer to 2 decimal places.)

Answer 1

Answer:

Green Star Corporation

Single-step Income Statement

For the year ended December 31, 2016

Revenue:
Sales Revenue	$1,550,000
Interest revenue	$38,000
Gain on sale of investments	$58,000
Total Revenues	$1,646,000
Expenses:
Cost of goods sold	$770,000
Selling expenses	$200,000
General and administrative expenses	$83,000
Interest expenses	$48,000
Income tax expenses	138,000
Total expenses	$1,239,000
Net Income	$407,000
Earning per share (Note-1)	$3.7

Green Star Corporation

Multi-step Income Statement

For the year ended December 31, 2016

Revenue:
Sales Revenue	$1,550,000
Less: Cost of goods sold	$770,000
Gross profit	$780,000
Operating expenses:
Selling expenses	$200,000
General and administrative expenses	$83,000
Total operating expenses	$283,00
Operating Income	$497,000
Non operating income & expenses:
Interest revenue	$38,000
Gain on sale of investment	$58,000
Interest expenses	($48,000)
Total non-operating	$48,000
Profit before tax	$545,000
Less: Income tax expenses	$138,000
Net Income	$407,000
Earning per share (Note-1)	$3.7

Note: 1 Calculation of earning per share:

Earning per share = Net Income / common stock outstanding during the year

= $407,000 / 110,000

= $3.7 per share.