Question

create a multi-step P&L in good form.

	Speedy Incorporated
	Debit	Credit
Common Dividends Paid	$      80,000
Cost of Goods Sold	$    800,000
Dividend revenue		$           60,000
Gain on Sale of Discontinued Operations		$         120,000
Gain on Sale of Equipment		$           70,000
Restructuring charge	$      10,000
Interest Expense	$    100,000
Loss on Discontinued Operations	$      75,000
Net Sales Revenue		$      1,730,000
Preferred Dividends Paid	$    100,000
Selling & Admin Expense	$    540,000
Additional information:
Tax rate	20%
Common Shares Outstanding 12/31/20	1,000,000
Preferred Shares Outstanding 12/31/20	800,000

Answer 1

Income statement (multi-step)
Net Sales revenue		$ 1,730,000
Cost of goods sold		($ 800,000)
Gross profit		$ 930,000
Operating expenses:
Selling and admin expense	$ 540,000
Restructuring charge	$ 10,000
Total operating expenses		$ 550,000
Operating income		$ 380,000
Non-operating income (expense):
Dividend revenue	$ 60,000
Gain on sale of equipment	$ 70,000
Interest expense	($ 100,000)
Total Non-operating income (expenses)		$ 30,000
Income before income taxes		$ 410,000
Income tax expense [410,000 X 20%]		($ 82,000)
Income from continuing operations		$ 328,000
Discontinued operations:
Loss on discontinued operations [$75,000 x 80%] , net of taxes	($ 60,000)
Gain on sale of discontinued operations [$120,000 x 80%], net of taxes	$ 96,000	$ 36,000
Net income		$ 364,000
Earning per share:
Continuing operations [328,000 ÷ 1,000,000]		0.328
Discontinuing operations [36,000 ÷ 1,000,000]		0.036
Net income [364,000 ÷ 1,000,000]		0.364