Chapter 4, Problem 4.5E

To determine

Income statement:

This is a financial statement that shows the net income earned or net loss suffered by a company through reporting all the revenues earned and expenses incurred by the company over a specific period of time. An income statement is also known as an operations statement, an earnings statement, a revenue statement, or a profit and loss statement. The net income is the excess of revenue over expenses.

Multistep Income Statement:

It is a one of the financial statements in which net income is derived through a series of steps or subtotals.

Earnings per share (EPS):

The share or portion of profit earned by each share is called as earnings per share.

Use the following formula to calculate EPS:

$\begin{array}{l}\text{Earnings }\\ \text{per share}\end{array}\}=\frac{\text{Net income }}{\text{Number of common shares outstanding}}$

To prepare: A multiple step income statement for the year 2016.