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The trial balance of Rollins Inc. included the following accounts as of December 31, 2021: Debits...

The trial balance of Rollins Inc. included the following accounts as of December 31, 2021:

Debits            Credits

Sales revenue                                                     5,900,000

Interest revenue                                                   40,000

Loss on sale of investments                        10,000

Loss on debt investments                          160,000

Gain on projected benefit obligation                                  260,000

Cost of goods sold                              4,400,000

Selling expense                                  400,000

Restructuring costs                               190,000

Interest expense                                  20,000

General and administrative expense                 300,000

The loss on debt investments represents a decrease in the fair value of debt securities and is classified as part of other comprehensive income. Rollins had 100,000 shares of stock outstanding throughout the year. Income tax expense has not yet been accrued. The effective tax rate is 25%.

3) Required: Prepare a 2021 multiple-step income statement for Rollins Inc. with earnings per share disclosure. (4 points)

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Expert Solution

Rollins Inc
Multi step Income Statement as on December 31, 2021
Particulars Amount
Sales Revenue    59,00,000
Less: Cost of Goods Sold -44,00,000
Gross profit    15,00,000
Operating Expense:
Selling expense    4,00,000
Restructuring costs    1,90,000
General and administrative expense    3,00,000
Total Operating Expenses    8,90,000     -8,90,000
Operating Income      6,10,000
Non Operating Income/Expense
Interest revenue        40,000
Gain on projected benefit obligation    2,60,000
Interest expense      -20,000
Loss on Sale of Investments      -10,000
Loss on debt investments -1,60,000
Total Non Operating    1,10,000      1,10,000
Profit before taxes      7,20,000
Taxes      1,80,000
Net Profit      5,40,000
Number of equity shares      1,00,000
Earnings per share               5.40

ekkarill92 answered 1 year ago
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