Prepare a multiple-step income statement for Simon Corporation for 2019 using the data provided , including EPS disclosures assuming 500,000 shares of common stock were outstanding for 2019. The income tax rate is 25%.
Sales revenue : $30,000,000
General and administrative expenses : 5,400,000
Deferred revenue: 50,000
Interest expense: 18,000
Selling expenses : 800,000
Interest revenue: 16,000
Cost of goods sold: 9,000,000
Dividend revenue: 8,000
The company's fiscal year end is December 31st. Income tax expense has not been determined. The following events also occurred during 2019. All transactions are material in amount unless otherwise noted.
1 -A chemical explosion caused $36,000 in uninsured damages to one of Simon's warehouses. The explosion was considered to be an unusual event.
2 -In October 2019, Simon sold its Paint division that qualified as a component of an entity for $1,600,000. The division generated "before tax income" of $360,000 from operations, from the beginning of the year through the date of disposal, and the book value of the division's assets was $700,000.
3 -$60,000 in restructuring costs were incurred in connection with corporate down-sizing.
4 -It was discovered that depreciation expense for 2018 was understated by $10,000 due to a mathematical error.
5 -Inventory that had a cost of $10,000 had become obsolete. The inventory was sold as scrap for $6,000.
6 -Simon Corporation experienced a foreign currency translation adjustment loss of $12,000.
7 -Investments were sold during the year at a loss of $3,000.
8 -Simon also had unrealized gains of $64,000 for the year on investments.
For the year ended 31st December 2019
Total Sales 30,000,000
Less - Cost of Goods sold 9,000,000
Gross Profit 21,000,000
Selling Expenses 800,000
Loss of written down obsolete goods 4,000
Loss from chemical explosion 36,000
Administration Expenses 5,400,000
Total Operating Expenses 6,240,000
Operating Income ( Gross Profit -Total Operating Expenses) 14,760,000
Other Incomes and Expenses
Interest Revenues 16,000
Loss on sale of investment 3,000
Interest Expenses 18,000
Dividend Revenue 8,000
Net total Other Incomes and Expenses 45,000
Earning before tax 14,715,000
Income Tax --
Net Income 14,715,000
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