Question

The following is a partial trial balance for General Lighting Corporation as of December 31, 2018:

Account Title	Debits	Credits
Sales revenue		2,500,000
Interest revenue		83,000
Loss on sale of investments	24,000
Cost of goods sold	1,220,000
Loss from write-down of inventory due to obsolescence	230,000
Selling expenses	330,000
General and administrative expenses	165,000
Interest expense	82,000

200,000 shares of common stock were outstanding throughout 2018. Income tax expense has not yet been recorded. The income tax rate is 40%.

Required:
1. Prepare a single-step income statement for 2018, including EPS disclosures.
2. Prepare a multiple-step income statement for 2018, including EPS disclosures.
  

Required 1

Required 2

Prepare a single-step income statement for 2018, including EPS disclosures. (Round EPS answer to 2 decimal places.)

	GENERAL LIGHTING CORPORATION Income Statement For the Year Ended December 31, 2018 0 0 0 Earnings per share

2

Required 2

Prepare a multiple-step income statement for 2018, including EPS disclosures. (Round EPS answer to 2 decimal places. Amounts to be deducted should be indicated with a minus sign.)

	GENERAL LIGHTING CORPORATION Income Statement For the Year Ended December 31, 2018 0 0 0 0 0 Earnings per share

Answer 1

General Lighting Corporation
Multi Step Income Statement
For the year ended 31 Dec 2018,
Detail	Amount	Amount
Sales		$2,500,000
Less: Cost of Goods Sold		$1,220,000
Gross Profit		$1,280,000
Less: Operating Expense
Selling Expense	330000
General & Administrative Expense	$165,000
Loss from inventory Write Down	$230,000
Total Operating Expense		$725,000
Net Operating Income (A)		$555,000
Othe Revenue
Interest Revenue	$83,000
Less: Other Expense
Interest Expense	-$82,000
Loss on Sale of Investment	-$24,000
Net other- Income (B)		-$23,000
Total Income Before Tax (A+B)		$532,000
Less: Tax Expense @40%		$212,800
Net Income After Tax		$319,200
No. of Share		200000
EPS ( Net Income/No. of Share)		$1.60
General Lighting Corporation
Single Step Income Statement
For the year ended 31 Dec 2018,
Detail	Amount	Amount
Revenue & Gain
Sales	$2,500,000
Interest Revenue	$83,000
Total Revenue & Gains		$2,583,000
Less: Expenses & Losses
Cost of Goods Sold	$1,220,000
Selling Expense	330000
General & Administrative Expense	$165,000
Loss from inventory Write Down	$230,000
Interest Expense	$82,000
Loss on Sale of Investment	$24,000
Total Expenses & Losses		$2,051,000
Net Income before Tax		$532,000
Less: Tax Expense @40%		$212,800
Net Income After Tax		$319,200
No. of Share		$200,000
EPS ( Net Income/No. of Share)		$1.60