Question

Rembrandt Paint Company had the following income statement items for the year ended December 31, 2018 ($ in 000s): Net sales $ 31,000 Cost of goods sold $ 17,000 Interest income 330 Selling and administrative expenses 3,800 Interest expense 610 Restructuring costs 2,100 In addition, during the year the company completed the disposal of its plastics business and incurred a loss from operations of $2.9 million and a gain on disposal of the component’s assets of $4.6 million. 600,000 shares of common stock were outstanding throughout 2018. Income tax expense has not yet been recorded. The income tax rate is 40% on all items of income (loss). Required: Prepare a multiple-step income statement for 2018, including EPS disclosures. (Any amounts to be deducted, including expenses, should be indicated with a minus sign. Enter your answers in thousands except earnings per share. Round EPS answers to 2 decimal places.)

Answer 1

REMBRANDT PAINT COMPANY
Single step Income Statement
For the Year Ended December 31, 2018
Particulars		Amount ($)
Sales revenue		31,000
Cost of goods sold		(17,000)
Gross Profit		14,000
Operating expenses
Selling and administrative expenses	(3,800)
Restructuring costs	(2,100)
		(5,900)
Operating income		8,100
Interest income (expense), net (330-610)		(280)
Income from continuing operations before income taxes		7,820
Income tax expense		3,128
Income from continuing operations
Discontinued operations
Income from operations of discontinued component (4.6-2.9) *1000	1,700
Income tax expense	(680)
Income on discontinued operations		1,020
Net income		4,148
Earnings per share
Income from continuing operations (3,128/600)		5.21
Income on discontinued operations (1,020/600)		1.70
Net income		6.91