Question

MULTIPLE STEP INCOME STATEMENT (HOMEWORK PROBLEM)

Prepare a multiple step income statement for ABC Corp. (includes EPS) for the year 2017 and the related statement of retained earnings using the following data:

Interest expense -------------------------------------------------------------13,000
Loss on disposal of a component of the business --------------------30,000
Loss from operations of X division (discontinued operations) -----42,000
Dividends declared and paid ----------------------------------------------20,000
Sales revenue ------------------------------------------------------------------1,000,000
Dividend revenue --------------------------------------------------------------19,500
Cost of merchandise sold ----------------------------------------------------308,500
Selling expenses ----------------------------------------------------------------145,000
Administrative expenses ------------------------------------------------------215,000
Retained Earnings as of January 1, 2015 --------------------------------200,000
30% Income tax Rate
50,000 weighted average shares of common stock outstanding

Answer 1

Multistep income statement				statement of retained earning
				opening balance		200000
sales revenue		1000000		add net income of year		172550
less cost of goods sold		308500		less dividend paid		20000
gross profit		691500		year end balance		152550
operating expenses		360000
administrative expense	215000
selling expense	145000
operating profit		331500
other income and expense
interest expense		13000
income from continuing operation before tax		318500
income tax -30%		95550
net income from continuing operation		222950
less loss on disposal of business net of 9000 tax		21000
less loss from operations of discontinue business net of 12600 of tax		29400
net income		172550
no of share outstanding		50000
EPS	172550/50000	3.45