Question

The following incorrect income statement was prepared by the accountant of the Axel Corporation:

AXEL CORPORATION Income Statement For the Year Ended December 31, 2021
Revenues and gains:
Sales revenue				$	700,000
Interest revenue					43,000
Gain on sale of investments					90,000
Total revenues and gains					833,000
Expenses and losses:
Cost of goods sold	$	380,000
Selling expense		70,000
Administrative expense		90,000
Interest expense		27,000
Restructuring costs		66,000
Income tax expense		50,000
Total expenses and losses					683,000
Net Income				$	150,000
Earnings per share				$	1.50

Required:
Prepare a multiple-step income statement for 2021 applying generally accepted accounting principles. The income tax rate is 25%. (Amounts to be deducted should be indicated with a minus sign. Round EPS answer to 2 decimal places.)
  

Answer 1