Question

In: Accounting

The following balances were taken from the books of Oriole Corp. on December 31, 2020. Interest...

The following balances were taken from the books of Oriole Corp. on December 31, 2020.

Interest revenue

$87,950

Accumulated depreciation—equipment

$41,950

Cash

52,950

Accumulated depreciation—buildings

29,950

Sales revenue

1,381,950

Notes receivable

156,950

Accounts receivable

151,950

Selling expenses

195,950

Prepaid insurance

21,950

Accounts payable

171,950

Sales returns and allowances

151,950

Bonds payable

101,950

Allowance for doubtful accounts

8,950

Administrative and general expenses

98,950

Sales discounts

46,950

Accrued liabilities

33,950

Land

101,950

Interest expense

61,950

Equipment

201,950

Notes payable

101,950

Buildings

141,950

Loss from earthquake damage

151,950

Cost of goods sold

622,950

Common stock

501,950

Retained earnings

22,950


Assume the total effective tax rate on all items is 20%.

Prepare a multiple-step income statement; 100,000 shares of common stock were outstanding during the year. (Round earnings per share to 2 decimal places, e.g. 1.48.)

Solutions

Expert Solution

Oriole Corp
Multiple-Step Income Statement
Particulars Amount Amount
Sales Revenue $1,381,950.00
sales return and allowances -$151,950.00
Sales discount -$46,950.00
Net Sales $1,183,050.00
Cost of goods sold -$622,950.00
Gross profit $560,100.00
Operating Expenses
Selling expenses $195,950.00
Administrative and General expenses $98,950.00
Total operating expenses -$294,900.00
Income from operation $265,200.00
Non-operating Income and expenses
Interest Revenue $87,950.00
interest expense -$61,950.00
Loss from earthquake damage -$151,950.00
Non-operating income and expenses -$125,950.00
Income Before Tax $139,250.00
Less: Tax @20% -$27,850.00
Net Income $111,400.00
Number of shares outstanding 100000
Earning per share
(Net income / Number of shares outstanding) (111400/100000)
$1.11

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