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The following is a partial trial balance for General Lighting Corporation as of December 31, 2016:...

The following is a partial trial balance for General Lighting Corporation as of December 31, 2016:
  Account Title Debits Credits
  Sales revenue 2,550,000
  Interest revenue 84,000
  Loss on sale of investments 24,500
  Cost of goods sold 1,230,000
  Loss from write-down of inventory due to obsolescence 240,000
  Selling expenses 340,000
  General and administrative expenses 170,000
  Interest expense 83,000

300,000 shares of common stock were outstanding throughout 2016. Income tax expense has not yet been recorded. The income tax rate is 40%.
Required:
1.

Prepare a single-step income statement for 2016, including EPS disclosures. (Round EPS answers to 2 decimal places.)

      


2.

Prepare a multiple-step income statement for 2016, including EPS disclosures. (Round EPS answers to 2 decimal places.)

      

Solutions

Expert Solution

Single Step Income statement
For the year ended 31 december 2016
  Sales revenue 2,550,000
  Interest revenue 84,000
Total revenue and gains 2,634,000
Expenses and losses
  Cost of goods sold 1,230,000
  Selling expenses 340,000
  General and administrative expenses 170,000
  Interest expense 83000
  Loss from write-down of inventory due to obsolescence 240,000
  Loss on sale of investments 24,500
Total Expenses and losses 2,087,500
Income before taxes 546,500
Less: income tax (40%) 218,600
net Income 327,900
Earning per share
Net income (327900/300000) 1.09
ans 2
Multiple Step Income statement
For the year ended 31 december 2016
  Sales revenue 2,550,000
  Less: Cost of goods sold 1,230,000
Gross Profit 1,320,000
Operating expenses
  Selling expenses 340,000
  General and administrative expenses 170,000
  Loss from write-down of inventory due to obsolescence 240,000
Total Operating expenses 750,000
Operating Income 570,000
Other Income/(expense)
  Interest expense -83000
  Interest revenue 84,000
  Loss on sale of investments -24,500
Total Other Income/(expense) -23,500
Income before taxes 546,500
Less: income tax (40%) 218,600
net Income 327,900
Earning per share
Net income (327900/300000) 1.09
If any doubt please comment

ekkarill92 answered 1 year ago
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