Question

The following are selected ledger accounts of Marigold Corporation at December 31, 2017: Cash $187,000 Entertainment expense $71,700 Inventory (as of Jan. 1, 2017) 540,000 Office expense 32,800 Sales revenue 4,269,000 Insurance expense 24,400 Unearned revenue 129,000 Advertising expense 51,600 Purchases 2,784,000 Freight-out 91,800 Sales discounts 36,000 Depreciation of office equipment 50,000 Purchase discounts 29,000 Depreciation of sales equipment 37,800 Salaries and wages (sales) 286,000 Telephone and Internet expense (sales) 16,500 Salaries and wages (administrative) 349,000 Utilities expense (administrative) 33,800 Purchase returns and allowances 15,000 Miscellaneous expense 8,300 Sales returns and allowances 77,000 Rental revenue 250,000 Freight-in 70,000 Loss on disposal of equipment 62,000 Accounts receivable 144,100 Interest expense 193,000 Sales commission expense 82,100 Common shares 810,000 Holland’s effective tax rate on all items is 25%. A physical inventory indicates that the ending inventory is $688,000. The number of common shares outstanding is 81,000. Prepare a condensed multi-step 2017 income statement for Marigold Corporation, showing expenses by function. Include calculation of EPS.

Prepare a condensed multi-step 2017 income statement for Marigold Corporation, showing expenses by function. Include calculation of EPS. (Round per share answer to 2 decimal places, e.g. 52.74.). please do it with an excel sheet

Answer 1

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Marigold Corporation
Income Statement
For the year ended 2017
Revenue from sales		4,269,000
Sales Discount	36,000
Sales return and allowances	77,000
Net Sales		113,000	4,382,000
Cost of merchandise sold			2,662,000
Gross Profit			1,720,000
Operating Expenses
Selling Expenses
Sales Salaries and wages	286,000
Freight Out	91,800
Advertising	51,600
Entertainment expenses	71,700
Telephone and internet expenses	16,500
Depreciation	37,800
Sales Commission	82,100
Total Selling Expenses		637,500
Administrative expenses
Salaries and wages	349,000
Depreciation	50,000
Office Expenses	32,800
Utilities	33,800
Insurance	24,400
Misc. Expenses	8,300
Total Administrative expenses		498,300
Total Operating Expenses			1,135,800
Income from operation			584,200
Other income and expenses
Rent Revenue		250,000
Interest expenses		193,000
Loss on disposal of equipment		62,000
Total Other income and expenses			(5,000)
Income before taxes			584,200
Taxes @ 25%			146,050
Net Income			438,150
Earning Per share ($ 438,150/81,000)			5.41
Cost of goods sold
Particulars	Amount $
Beginning Inventory	540,000
Purchase	2,784,000
Less:- Purchase Discount	29,000
Less:- Purchase return and allowances	15,000
Add:-Freight In	70,000
Net Purchase	2,810,000
Ending Inventory	688,000
Cost of goods sold	2,662,000