Income statement format; single step and multiple step [LO4-1, 4-3, 4-5] The following is a partial trial balance for General Lighting Corporation as of December 31, 2021: Account Title Debits Credits Sales revenue 3,350,000 Interest revenue 100,000 Loss on sale of investments 32,500 Cost of goods sold 1,390,000 Loss on inventory write-down (obsolescence) 400,000 Selling expense 500,000 General and administrative expense 250,000 Interest expense 99,000 There were 300,000 shares of common stock outstanding throughout 2021. Income tax expense has not yet been recorded. The income tax rate is 25%. Required Prepare a single-step income statement for 2018, including EPS disclosures

Net income = $583,875

Earning Per Share (EPS) = $1.95 per share.

Explanation:

A single step income statement can be described as a financial statement that do not break revenues and expenses into there respective different categories, but only use one column each for revenue and expenses.

For this question, a single-step income statement for 2021 can be prepared as follows:

Note: Year 2021 is used as the correct year since it is metioned twice in the question against 2018 that was erroneously mentioned once.

General Lighting Corporation

Income Statement for December 31, 2021

Details $

Revenues:

Sales revenue 3,350,000

Interest revenue 100,000

Total revenue (A) 3,450,000

Expenses:

Cost of goods sold 1,390,000

Selling expense 500,000

General and administrative expense 250,000

Interest expense 99,000

Loss on sale of investments 32,500

Loss on inventory write-down (obsol.) 400,000

Total expenses (B) 2,671,500

Income before tax (A - B) 778,500

Tax (25% * $778,500) (194,625)

Net income 583,875

EPS (583,875 / 300,000) 1.95