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18 December, 04:44

The accountant of Weatherspoon Shoe Co. has compiled the following information from the company's records as a basis for an income statement for the year ended December 31, 2010. Rental revenue $29,000Interest expense 18,000Market appreciation on land above cost 31,000Wages and salaries-sales 114,800Materials and supplies-sales 17,600Income tax 30,600Wages and salaries-administrative 135,900Other administrative expenses 51,700Cost of goods sold 516,000Net sales 980,000Depreciation on plant assets (70% selling, 30% administrative) 65,000Dividends declared 16,000There were 20,000 shares of common stock outstanding during the year. (a) Prepare a multiple-step income statement. (Round earnings per share to 2 decimal places, e. g. 5.25. For multiple entries list from largest to smallest amounts, e. g. 10, 5, 1. Enter all amounts as positive amounts and subtract where necessary.)

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  1. 18 December, 06:58
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    The preparation of the multiple-step income statement is presented below:

    Weather spoon Shoe Co

    Multiple Income statement

    For the year ended December 31, 2010

    Net sales $980,000

    Less: Cost of goods sold $496,000

    Gross profit on sales $484,000

    Operating Expenses

    Less:

    Selling expenses

    Wages and salaries $114,800

    Depreciation expenses (70% * $65,000) $45,500

    Materials and supplies $17,600

    Administrative expenses

    Wages and salaries $135,900

    Other administrative expenses $51,700

    Depreciation expenses (30% * $65,000) $19,500

    Income from operations $99,000

    Other Revenues and Gains

    Rental revenue $29,000

    Other Expenses and Losses

    Less: Interest expense $18,000

    Income before income tax $110,000

    Less: Income tax $37,400

    Net income $72,600

    Earnings per share ($72,600 : 20,000) $3.63
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