Question

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

Answer 1

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