Question

Presented below is information related to Ivan Calderon Corp. for the year 2020. Net sales Cost of goods sold Selling expenses Administrative expenses Dividend revenue Interest revenue $1,300,000 780,000 65,000 48,000 20,000 7,000 Write-off of inventory due to obsolescence Depreciation expense omitted by accident in 2019 Casualty loss Cash dividends declared Retained earnings at December 31, 2019 Effective tax rate Common shares outstanding $80,000 55,000 50,000 45,000 980,000 20% 60,000 Instructions: Prepare a multiple-step income statement. Round earnings per share to 2 decimal places.
Need help finishing the income statement, please!

Answer 1

NOTE: Ivan Calderon Corp. Multi-Step Income Statement For Year Ended December 31, 2021 Net Sales $1,300,000 Cost of goods sold $700,000 (Ref: NOTE] Gross profit $600,000 Operating expenses: Selling Expenses $65,000 Administrative Expenses $48,000 Total operating expenses $113,000 Operating Income $487,000 Other revenues and expenses: Dividend revenue $20,000 Interest revenue $7,000 Total other revenues & expenses $27,000 Income Before Extraordinary items $514,000 Extraordinary items: Casualty Loss $50,000 Net Income $464,000 When inventory is written off due to obsolescence, firm's cost of goods sold for the period shall be adjusted because inventory is a direct or indirect material cost accounted as cost of goods manufactured already. If there requires any adjustment on inventory's value due to obsolescence, it is to be adjusted against cost of goods sold. As a result, current balance in cost of goods sold account shall be decreased to the extent of inventory written off due to obsolescence. Current balance in cost of goods sold account Less: Inventory written off due to obsolescence Updated balance in cost of goods sold account $780,000 $80,000 $700,000 Depreciation expense omitted by accident in 2019 shall be adjusted against retained earnings balance as it is a prior- priod adjustment related item and so it shall not be reported on income statement.