Question

The following balances were taken from the books of Shamrock Corp. on December 31, 2017.

Interest revenue		$87,050		Accumulated depreciation—equipment		$41,050
Cash		52,050		Accumulated depreciation—buildings		29,050
Sales revenue		1,381,050		Notes receivable		156,050
Accounts receivable		151,050		Selling expenses		195,050
Prepaid insurance		21,050		Accounts payable		171,050
Sales returns and allowances		151,050		Bonds payable		101,050
Allowance for doubtful accounts		8,050		Administrative and general expenses		98,050
Sales discounts		46,050		Accrued liabilities		33,050
Land		101,050		Interest expense		61,050
Equipment		201,050		Notes payable		101,050
Buildings		141,050		Loss from earthquake damage		151,050
Cost of goods sold		622,050		Common stock		501,050
				Retained earnings		22,050

Assume the total effective tax rate on all items is 34%.

Prepare a multiple-step income statement; 100,000 shares of common stock were outstanding during the year. (Round earnings per share to 2 decimal places, e.g. 1.48.)

Answer 1

Shamrock Corp.
multi Income Statement
For the year ended 31 December, 2017
Sales Revenue
Sales		$ 1,381,050
Less: Sales Return and allowances	$ 151,050
Less: Sales Discounts	$    46,050	$     197,100
Net Sales Revenue		$ 1,183,950
Cost of goods sold		$     622,050
Gross Profit		$     561,900
Operating Expenses
Accumulated depreciation - Equipment	$    41,050
Accumulated depreciation - Building	$    29,050
Selling expenses	$ 195,050
Administrative and general expenses	$    98,050
Total Operating expenses		$     363,200
Income from operations		$     198,700
Non operating income and (expenses)
Interest revenue	$    87,050
Interest expense	$ (61,050)
Total Non operating income and (expenses)		$        26,000
Income before income taxes		$     224,700
Income taxes ($224,700*34%)		$        76,398
Income from continuing operations before extra ordinary items		$     148,302
Extra ordinary loss because of earthquake (net of $51,357 income tax credit)		$     (99,693)
Net income		$        48,609
Components of income
Income from continuing operations ($148,302/100,000)		$            1.48
Extra ordinary loss because of earthquake ($99,693/100,000)		$          (1.00)
Net income ($48,609/100,000)		$            0.49

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