Question

Pina Colada Corporation had net sales revenue of $5,860,000 and investment revenue of $220,000 for the year ended December 31, 2020. Other items pertaining to 2020 were as follows:

Cost of goods sold		$4,610,000
Salaries and wages expense (sales)		450,000
Advertising expense		122,000
Entertainment expense		81,000
Selling expenses		653,000
Salaries and wages expense (administrative)		297,000
Rent expense		100,000
Utilities expense		45,000
Administrative expenses		442,000
Increase in value of company reputation		70,000
Unrealized gain on value of patents		35,000
Interest expense		153,000
Income tax expense		87,000

Pina Colada has 100,000 common shares outstanding throughout the year.

Prepare a multiple-step income statement for Pina Colada Corporation, showing expenses by function. Include calculation of EPS. (Round per share answer to 2 decimal places, e.g. 52.75.)

Pina Colada Corporation Income Statement For the Year Ended December 31, 2020December 31, 2020
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				enter a total amount for the first part
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				enter a subtotal of the two previous amounts
				enter a total amount for the second part
enter an income statement item				enter a dollar amount
				enter a subtotal of the two previous amounts
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				enter a total amount for all three parts
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				$enter a total net income or loss amount
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Answer 1

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Pina Colada
Income Statement	Amount $	Amount $
Sales Revenue		5,860,000.00
Cost of Goods Sold		4,610,000.00
Gross profit		1,250,000.00
Less: Operating expenses
Selling expenses
Salaries and wages expense (sales)	450,000.00
Advertising expense	122,000.00
Entertainment expense	81,000.00
Selling expense	653,000.00
Total Selling expense	1,306,000.00
Administrative expenses
Salaries and wages expense (administrative)	297,000.00
Rent expense	100,000.00
Utilities expense	45,000.00
Administrative expenses	442,000.00
Total Administrative expenses	884,000.00
Total Operating expenses		2,190,000.00
Operating income		(940,000.00)
Other income (expenses)
Investment revenue	220,000.00
Interest expense	(153,000.00)	67,000.00
Income before tax		(873,000.00)
Less: Income Tax		87,000.00
Net Income		(960,000.00)
Common shares outstanding		100,000.00
Earnings Per Share		(9.60)