Question

In: Accounting

The following information was taken from Egeland Ltd.’s adjusted trial balance as at July 31, 2020:...

The following information was taken from Egeland Ltd.’s adjusted trial balance as at July 31, 2020:

Sales revenue $2,777,000
Interest expense 45,000
Cost of goods sold 1,560,674
Utilities expense 17,000
Depreciation expense 216,000
Distribution expenses 410,000
Administration expenses 278,000
Advertising expense 60,000
Interest revenue 21,000
Income tax expense 78,000
Dividends declared—Common shares 27,000
Dividends declared—Preferred shares 14,526

Prepare a single-step statement of income for the year ended July 31, 2020.
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Prepare a multi-step statement of income for the year ended July 31, 2020.

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Determine Egeland’s gross margin percentage for the year. (Round answer to 1 decimal place, e.g. 52.7%.)

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If Egeland had 88,000 common shares outstanding throughout the year, determine the company's basic earnings per share. (Round answer to 2 decimal places, e.g. 52.75.)

Solutions

Expert Solution

Egeland Ltd.
Multiple Income Statement
Particulars Amount Amount
Sales Revenue $2,777,000.00
Less : Cost Of Goods Sold $1,560,674.00
Gross Profit $1,216,326.00
Less : Operating Expenses
Utilities Expenses $17,000.00
Advertising Expense $60,000.00
Distribution Expenses $410,000.00
Administrative Expenses $278,000.00
Depreciation Expenses $216,000.00 $981,000.00
Operating Income $235,326.00
Other Income /(Loss)
Interest Revenue $21,000.00
Interest Expenses -$45,000.00 -$24,000.00
Income Before Taxes $211,326.00
Less : Income taxes $78,000.00
Income After Taxes $133,326.00
Egeland Ltd.
Single Step Income Statement
Particulars Amount Amount
Revenue
Sales Revenue $2,777,000.00
Interest Revenue $21,000.00 $2,798,000.00
Total Expense
Cost Of Goods Sold $1,560,674.00
Utilities Expenses $17,000.00
Advertising Expense $60,000.00
Distribution Expenses $410,000.00
Administrative Expenses $278,000.00
Depreciation Expenses $216,000.00
Interest Expenses $45,000.00
Income taxes $78,000.00 $2,664,674.00
Net Income $133,326.00
Gross Margin peercentage for the year= Gross Profit/ Sales
=1216326/2777000=43.8%
Compny EPS= Earning Available for Equity/ No. of Common Stock
=(133326-14526)/88000=$1.35 per share

ekkarill92 answered 7 months ago
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