Question

Prepare an income statement for Virginia Slim Wear. Take your calculations all the way to computing earnings per share. (Round EPS answer to 2 decimal places.)
  

Sales	$	1,360,000
Shares outstanding		104,000
Cost of goods sold		700,000
Interest expense		34,000
Selling and administrative expense		49,000
Depreciation expense		23,000
Preferred stock dividends		86,000
Taxes		100,000

Answer 1

Virginia Slim Wear

Income Statement for the year ----

Sales		1,360,000
Less:	Cost of goods sold	700,000
Gross profit		660,000
Less:	Selling & Administrative expenses	49,000
	Depreciation	23,000
Earnings before interest & tax		588,000
Less:	Interest	34,000
Income Before Income Tax (EBT)		554,000
Less: Income Tax		100,000
Profit after tax		454,000
Less; Preference Dividend		86,000
Profit available to equity shareholders		368,000
Shares outstanding		104,000
Earnings Per Share*		3.54

*Earnings Per Share = Profit available to equity shareholders/Shares outstanding