Question

The following is a partial trial balance for the Green Star Corporation as of December 31, 2016:

Account Title	Debits	Credits
Sales revenue		1,300,000
Interest revenue		33,000
Gain on sale of investments		53,000
Cost of goods sold	720,000
Selling expenses	175,000
General and administrative expenses	78,000
Interest expense	43,000
Income tax expense	133,000

150,000 shares of common stock were outstanding throughout 2016.

Required:
1.	Prepare a single-step income statement for 2016, including EPS disclosures. (Round EPS answer to 2 decimal places.)
2.	Prepare a multiple-step income statement for 2016, including EPS disclosures. (Amounts to be deducted should be indicated with a minus sign. Round EPS answer to 2 decimal places.)

Answer 1

Solution 1:

Green Star corporation
Single step income statement
For year ended 2016
Particulars	Amount
Revenues:
Sales revenue	$1,300,000.00
Interest revenue	$33,000.00
Gain on sale of investment	$53,000.00
Total revenues	$1,386,000.00
Expenses:
Cost of goods sold	$720,000.00
Selling expense	$175,000.00
General and administrative expenses	$78,000.00
Interest expense	$43,000.00
Income tax expense	$133,000.00
Total Expenses	$1,149,000.00
Net Income	$237,000.00
Earning per share ($237,000/150000)	$1.58

solution 2:

Green Star corporation
Multiple step income statement
For year ended 2016
Particulars	Amount
Sales revenue	$1,300,000.00
Cost of goods sold	$720,000.00
Gross Profit	$580,000.00
Operating Expenses:
Selling expense	$175,000.00
General and administrative expenses	$78,000.00
Operating income	$327,000.00
Add: Other revenues:
Interest revenue	$33,000.00
Gain on sale of investment	$53,000.00
Earning before interest and taxes	$413,000.00
Less: Interest expense	$43,000.00
Earning before taxes	$370,000.00
Income tax expense	$133,000.00
Net Income	$237,000.00
Earning per share ($237,000/150000)	$1.58