
Concept explainers
1.
Income Statement
The financial statement which reports revenues and expenses from business operations and the result of those operations is reported as net income or net loss for a particular time period is referred to as income statement
Multi step income statement
A multiple step income statement refers to the income statement that shows the operating, and non-operating activities of the business, under separate head.
Single-step income statement
Format in which a single subtotal of all revenue items are listed in one column and a single subtotal of all expense items including cost of goods sold are listed in another column. Thus, the subtotal of all expense items is deducted from the subtotal of all revenue items to arrive at the net income at the bottom of the statement.
EPS (Earnings Per Share)
The share or portion of profit earned by each share is called as earnings per share.
To Prepare: A single-step income statement for 2016, including EPS.
1.

Explanation of Solution
Prepare a single-step income statement for 2018 for Corporation G.
Corporation G | ||
Single- Step Income Statement | ||
For the Year Ended December 31, 2018 | ||
Particulars | Amount ($) | Amount ($) |
Revenues and gains: | ||
Sales | 2,350,000 | |
Interest | 80,000 | |
Total revenues and gains | 2,430,000 | |
Less: Expenses and losses: | ||
Cost of goods sold | 1,200,300 | |
Selling | 300,000 | |
General and administrative | 150,000 | |
Interest | 90,000 | |
Loss on sale of investments | 22,500 | |
Loss from inventory write-down | 200,000 | |
Total expenses and losses | (1,962,800) | |
Income before income taxes | 467,200 | |
Less: Income tax expense (a) | (186,880) | |
Net income | 280,320 | |
Earnings per share (b) | $0.93 | |
Table (1)
Working Notes:
Calculate the income tax expenses
Calculate the EPS
Hence, the net income of the Corporation G under Single–step income statement is $280,320 with the EPS value of $0.93.
2.
To Prepare: Multiple-step income statement for 2016, including EPS.
2.

Explanation of Solution
Prepare the multi-step income statement for 2016, Corporation G.
Corporation G | ||
Multi- Step Income Statement | ||
For the Year Ended December 31, 2016 | ||
Particulars |
Amount ($) |
Amount ($) |
Sales revenue | 2,350,000 | |
Cost of goods sold | 1,200,300 | |
Gross profit | 1,149,700 | |
Operating expenses: | ||
Selling | 300,000 | |
General and administrative | 150,000 | |
Loss from inventory write-down | 200,000 | |
Total operating expenses | 650,000 | |
Operating income | 499,700 | |
Other income (expense): | ||
Interest revenue | 80,000 | |
Loss on sale of investments | (22,500) | |
Interest expense | (90,000) | |
Total other income (expense), net | (32,500) | |
Income before income taxes | 467,200 | |
Income tax expense (a) | 186,880 | |
Net income | 280,320 | |
Earnings per share (b) | 0.93 |
Table (2)
Hence, the net income of the Corporation G under Multi–step income statement is $280,320 with the EPS value of $0.93.
Want to see more full solutions like this?
Chapter 4 Solutions
Intermediate Accounting w/ Annual Report; Connect Access Card
- Examine the importance of proper evaluation of investment projects.arrow_forwardAndretti Company has a single product called a Dak. The company normally produces and sells 60,000 Daks each year at a selling price of $32 per unit. The company’s unit costs at this level of activity are given below: Direct materials $ 10.00 Direct labor 4.50 Variable manufacturing overhead 2.30 Fixed manufacturing overhead 5.00 ($300,000 total)Variable selling expenses 1.20 Fixed selling expenses 3.50 ($210,000 total)Total cost per unit $ 26.50 The company has 1,000 Daks on hand with some irregularities that make it impossible to sell them at the normal price through regular distribution channels. What unit cost figure is relevant for setting a minimum selling price to liquidate these units?arrow_forwardThe financial manager at Rico Ltd had to choose between these two projects, alpha and beta, which have the following net cash inflows: Year Alpha Beta 1 5,000 36,000 2 18,500 36,500 3 36,200 37,000 4 123,000 175,000 Each project requires an initial investment of 118,000. No scrap values are forecast. Required:1. Calculate the payback period for each project. Answers must be expressed in years and months. Which project should be chosen and why? 2. Calculate the Net Present Value (NPV) for each project, using a discount rate of 12%. Which project would you choose and why? 3. Calculate the internal Rate of Return for each project. Which project should be chosen and Why?arrow_forward
- Critically evaluate the strengths and limitations of the Capital Asset Pricing Model.arrow_forward1. Provide a brief history of the tax system in Jamaica, highlighting the different types of taxes used in the country. 2. Identify and discuss at least 6 problems with the Jamaican tax system and then provide recommendations to alleviate the problems.arrow_forwardCan you please help me by providing clear neat organized answers. Thank you!arrow_forward
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education





