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.)

Question

Sasha Cook

Business

2 May, 13:47

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.)

+1

Answers (1)

Know the Answer?

Kendall Stokes · Answer 1

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