multiple-step income statement
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.)

Transcribed Image Text: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
Expert Solution

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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