Question

Exercise 4-2 Income statement format; single step and multiple step [LO4-1, 4-5]

The following is a partial trial balance for the Green Star Corporation as of December 31, 2018:

Account Title	Debits	Credits
Sales revenue		1,350,000
Interest revenue		34,000
Gain on sale of investments		54,000
Cost of goods sold	730,000
Selling expenses	180,000
General and administrative expenses	79,000
Interest expense	44,000
Income tax expense	134,000

100,000 shares of common stock were outstanding throughout 2018.

Required:
1. Prepare a single-step income statement for 2018, including EPS disclosures.
2. Prepare a multiple-step income statement for 2018, including EPS disclosures.
  

Answer 1

	Green Star Corporation
	Single Step Income Statement
	For the year End December 31, 2018
	Revenues:	Amount	Amount
	Sales Revenue	$        13,50,000
	Interest Revenue	$              34,000
	Gain on sales of investments	$              54,000
	Total Revenues		$ 14,38,000
	Expenses:
	Cost of Goods Sold	$           7,30,000
	Selling Expenses	$           1,80,000
	General and adminsitrative expenses	$              79,000
	Interest Expenses	$              44,000
	Income tax expenses	$           1,34,000
	Total Expenses		$ 11,67,000
	Net Income		$    2,71,000
	Divide by No. of Shares Outstanding		1,00,000	shares
	Earning Per shares		$            2.71	Per Share
	Green Star Corporation
	Multiple Step Income Statement
	For the year End December 31, 2018
	Particulars	Amount
	Sales Revenue		$ 13,50,000
	Cost of Goods Sold		$    7,30,000
	Gross Profit		$    6,20,000
	Less : Operating Expenses
	Selling Expenses	$           1,80,000
	General and adminsitrative expenses	$              79,000
	Interest Expenses	$              44,000
	Total Expenses		$    3,03,000
	Operating Income		$    3,17,000
	Non-Opearing and others
	Interest Revenue	$              34,000
	Gain on sales of investment	$              54,000
			$        88,000
	Net Income before Taxes		$    4,05,000
	Less : IncomeTaxe Expenses		$    1,34,000
	Net income after Taxes or Bal. Available to Shareholers		$    2,71,000
	Divide by No. of Shares Outstanding		1,00,000	shares
	Earning Per shares		$            2.71	Per Share