12. The following incorrect income statement was prepared by the accountant of the Axel Corporation:AXEL CORPORATIONIncome StatementFor the Year Ended December 31, 2021Revenues and gains: Sales revenue $790,000Interest revenue 52,000Gain on sale of investments 99,000Total revenues and gains 941,000Expenses and losses: Cost of goods sold$425,000 Selling expense 79,000 Administrative expense 99,000 Interest expense 36,000 Restructuring costs 75,000 Income tax expense 56,750 Total expenses and losses 770,750Net Income $170,250Earnings per share $1.70 Required:Prepare a multiple-step income statement for 2021 applying generally accepted accounting principles. The income tax rate is 25%. (Amounts to be deducted should be indicated with a minus sign. Round EPS answer to 2 decimal places.) For the Year Ended December 31, 2021Gross profitOperating expenses:Total operating expensesOperating incomeOther income (expense):Total other income, netIncome before income taxesNet incomeEarnings per share

Answered: multiple-step income statement

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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12. The following incorrect income statement was prepared by the accountant of the Axel Corporation:

AXEL CORPORATION Income Statement For the Year Ended December 31, 2021
Revenues and gains:
Sales revenue			$	790,000
Interest revenue				52,000
Gain on sale of investments				99,000
Total revenues and gains				941,000
Expenses and losses:
Cost of goods sold	$	425,000
Selling expense		79,000
Administrative expense		99,000
Interest expense		36,000
Restructuring costs		75,000
Income tax expense		56,750
Total expenses and losses				770,750
Net Income			$	170,250
Earnings per share			$	1.70

Required:
Prepare a multiple-step income statement for 2021 applying generally accepted accounting principles. The income tax rate is 25%. (Amounts to be deducted should be indicated with a minus sign. Round EPS answer to 2 decimal places.)

For the Year Ended December 31, 2021
Gross profit
Operating expenses:
Total operating expenses
Operating income
Other income (expense):
Total other income, net
Income before income taxes
Net income
Earnings per share

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Multi-step income statement

Multi-step income statement is a format of preparing classified income statement. Each item in the multi-step income statement is grouped into respective category.

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