In: Accounting
Earnings per Share and Multiple-Step Income
Statement
The following summarized data are related to Garner Corporation's
operations:
Sales revenue | $2,442,000 | |
Cost of goods sold | 1,419,000 | |
Selling expenses | 198,000 | |
Administrative expenses | 157,300 | |
Loss from plant strike | 106,700 | |
Income tax expense | 224,400 | |
Shares of common stock | ||
Outstanding at January 1 | 61,000 | shares |
Additional issued at April 1 | 17,000 | shares |
Additional issued at August 1 | 3,000 | shares |
Required
Prepare a multiple-step income statement for Garner Corporation.
Include earnings per share disclosure at the bottom of the income
statement. Garner Corporation has no preferred stock.
GARNER CORPORATION Income Statement For the Year Ended December 31 |
||
---|---|---|
Sales Revenue | $Answer | |
Cost of Goods Sold | Answer | |
Gross Profit on Sales | Answer | |
Selling Expenses | $Answer | |
Administrative Expenses | Answer | Answer |
Operating Income | Answer | |
Loss from Plant Strike | Answer | |
Income before Taxes | Answer | |
Income Tax Expense | Answer | |
Net Income | $Answer | |
Earnings per share of Common Stock | $Answer |
Garner Corporation | |||
Multiple-step income statement | |||
For the Year Ended December 31 | |||
Sales revenue | 2,442,000 | ||
Cost of goods sold | 1,419,000 | ||
Gross profit | 1,023,000 | ||
Operating expenses: | |||
Selling expenses | 198,000 | ||
Administrative expenses | 157,300 | ||
Total operating expenses | 355,300 | ||
Operating income | 667,700 | ||
Other revenue and expense: | |||
Loss from Plant strike | (106,700) | ||
(106,700) | |||
Income before income taxes | 561,000 | ||
Income taxes | 224,400 | ||
Net income | 336,600 | ||
Earnings per share of Common Stock | 4.49 | ||
Earnings per share = (Net Income / Weighted average common shares outstanding) | |||
= (336,600/75,000) = | |||
Weighted average common shares outstanding | |||
Opening Balance | 61,000 | ||
Add : Shares issued on May 1 | 12,750 | (17,000/12)*9 | |
Add : Shares issued on September 1 | 1,250 | (3,000/12)*5 | |
Weighted average common shares outstanding | 75,000 | 4.49 |