Question

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

Net sales	$	34,000	Cost of goods sold	$	18,500
Interest income		360	Selling and administrative expenses		4,100
Interest expense		670	Restructuring costs		2,400

In addition, during the year the company completed the disposal of its plastics business and incurred a loss from operations of $3.2 million and a gain on disposal of the component’s assets of $5.2 million. 600,000 shares of common stock were outstanding throughout 2018. Income tax expense has not yet been recorded. The income tax rate is 40% on all items of income (loss).

Required:
Prepare a multiple-step income statement for 2018, including EPS disclosures

Answer 1

Rembrandt Paint Company
MultI Step Income Statement
For the Year Ended December 31,2018
		($ in 000s)
Net Sales		34000
Less: Cost of Goods Sold		-18500
Gross Profit		15500
Less:Operating Expenses
Selling and Administrative Expenses	-4100
Total Operating Expenses		-4100
Operating Income		11400
Other Incomes and Expenses
Interest Income	360
Interest Expense	-670
Restructuring costs	-2400
Net Other Income and Expenses		-2710
Income from continuing operations before Income taxes		8690
Less: Income Taxes		-3476
Net Income from continuing operations		5214
Loss from discontinuing operations (net of tax) (3200 X 60%)		-1920
Income from discontinuing operations assets (net of tax) (5200 X60%)(		3120
Net Income from discontinuing operations		1200
Net Income		6414
Outstanding # of Shares 600,000
EPS from continuing operations (5,214,000/600,000)	8.69
EPS from discontinuing operations (1,200,000/600,000)	2.00
Total EPS (6,414,000/600,000)	10.69