Question

Rembrandt Paint Company had the following income statement items for the year ended December 31, 2018 ($ in 000s):

Net sales	$	28,000	Cost of goods sold	$	15,500
Interest income		300	Selling and administrative expenses		3,500
Interest expense		550	Restructuring costs		1,800

In addition, during the year the company completed the disposal of its plastics business and incurred a loss from operations of $2.6 million and a gain on disposal of the component’s assets of $4.0 million. 700,000 shares of common stock were outstanding throughout 2018. Income tax expense has not yet been recorded. The income tax rate is 30% on all items of income (loss).

Required:
Prepare a multiple-step income statement for 2018, including EPS disclosures. (Any amounts to be deducted, including expenses, should be indicated with a minus sign.Enter your answers in thousands except earnings per share. Round EPS answers to 2 decimal places.)
  

Answer 1

Rembrandt Paint Co.
Income Statement for the year ended December 31, 2018
	Amount $           ('000)	Amount $              ('000)
Net sales		28,000
Cost of goods sold		15,500
Gross profit		12,500
Operating expenses:
Selling and administrative expenses	3,500
Restructuring costs	1,800	-5,300
Income from operations		7,200
Other income / expenses
Interest income	300
Interest expense	-550	-250
Income from continuing operations		6,950
Income from discontinued operations(4,000-2,600)		1,400
Income before income tax		8,350
Income tax expense@30%		2,505
Net income		5,845
Number of shares outstanding		7,00,000
Earnings per share		$ 8.35