Question

Splish Corporation had net sales of $2,413,100 and interest revenue of $33,400 during 2020. Expenses for 2020 were cost of goods sold $1,467,000, administrative expenses $220,000, selling expenses $292,200, and interest expense $53,900. Splish’s tax rate is 30%. The corporation had 109,200 shares of common stock authorized and 71,090 shares issued and outstanding during 2020. Prepare a condensed multiple-step income statement for Splish Corporation.

Answer 1

Answer:

Earnings per share is  $4.07

Explanation:

we know here that Splish Corporation

Income Statement  For Year End December 31, 2020

so we have given that

Net sales = $2,413,100

Cost of goods sold = $1,467,000

Gross profit will be = Net sales -  Cost of goods sold

Gross profit = 2,413,100 - 1,467,000

Gross profit = $946100

and

selling expenses  = $292,200  

administrative expenses = $220,000

so total expensive is selling + administrative expenses

total expensive = 292,200 + 220,000  = $512200

Income from operations is = Gross profit - total expensive

Income from operations is  = 946100 - 512200 = $433900

and

Other revenue and gains  

interest revenue = $33,400

Other expenses and losses  

Interest expense $53,900

so Interest expense will be = 53,900 - 33,400 = $20500

and

Income before income tax = 433900 - 20500  = $413400

Income tax expense of 30% × $413400 = $124020

so

Net income = $413400 - $124020 = $289380

and

Earnings per share is  = $\frac{net income}{common stock}$

Earnings per share is  =  $\frac{289380}{71,090}$

Earnings per share is  $4.07