Question

P13-3A. Earnings per Share and Multiple-Step Income Statement The following summarized data relate to Robert Corporation's current operations:

Sales revenue...……………………………………………………………………………………………………….$800,000

Costs of goods sold...………………………………………………………………………………………………..460,000

Selling expenses...…………………………………………………………………………………………………..65,000

Administrative expense...………...………………………………………………………………………………..72,000

Loss on-sale of equipment................................................................................................................................4,000

Income tax expense............................................................................................................................................42,000

Shares of common stock

Outstanding at January 1................................................................................................................................20,000 shares

Additional Issued at May 1...............................................................................................................................7,000

Additional Issued at November 1.........................................................................................................………..2,000 shares

Required

Prepare a multiple-step income statement for Robert Corporation for the year. Include earnings per share disclosure at the bottom of the income statement.

Answer 1

Robert Corporation
Income Statement (Multi-Step)
For Year Ended Decemebr 31
Sales		$800,000
Cost of goods sold		$460,000
Gross Profit		$340,000
Operating Expenses:
Selling expenses	$65,000
Administrative Expenses	$72,000
Total operating expenses		$137,000
Operating Income		$203,000
Other Items:
Loss on Sale of Equipment		$4,000
Income before income tax		$199,000
Income tax expenses		$42,000
Net Income		$157,000
Components of Income		EPS
Weighted average of shares		25,000
(20,000 + 7,000 x 8/12 + 2,000 x 2/12)
Net Income		$6.28