Question

The following is a partial trial balance for the Green Star Corporation as of December 31, 2021:

There were 100,000 shares of common stock
 outstanding throughout 2021.

 

Required:
1. Prepare a single-step income statement for 2021, including EPS disclosures, by inserting the amounts above into the appropriate section.
2. Prepare a multiple-step income statement for 2021, including EPS disclosures, by inserting the amounts above into the appropriate section.

Answer 1

1.

GREEN STAR CORPORATION
Income Statement
For the Year Ended December 31, 2021
Revenues and gains:
Sales revenue ...............................................		$1,300,000
Interest revenue ............................................		30,000
Gain on sale of investments .........................		50,000
Total revenues and gains ..........................		1,380,000
Expenses and losses:
Cost of goods sold .......................................	$720,000
Selling expense.............................................	160,000
General and administrative expense.............	75,000
Interest expense............................................	40,000
Total expenses and losses ........................		995,000
Income before income taxes ...........................		385,000
Income tax expense ........................................		130,000
Net income .....................................................    Earnings per share .........................................		$ 255,000   $2.55

2.

GREEN STAR CORPORATION
Income Statement
For the Year Ended December 31, 2021
Sales revenue ..................................................		$1,300,000
Cost of goods sold .........................................		720,000
Gross profit ....................................................		580,000
Operating expenses:
Selling expense.............................................	$160,000
General and administrative expense.............	75,000
Total operating expenses .........................		235,000
Operating income ...........................................		345,000
Other income (expense):
Interest revenue ............................................	30,000
Gain on sale of investments .........................	50,000
Interest expense ...........................................	(40,000)
Total other income, net ............................		40,000
Income before income taxes ...........................		385,000
Income tax expense ........................................		130,000
Net income .....................................................		$ 255,000
Earnings per share .........................................		$2.55

Earnings per share .........................................

$2.55