Question

The accountant of Windsor 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, 2025. There were 20,000 shares of common stock outstanding during the year. Prepare a multiple-step income statement. (Round earnings per share to 2 decimal places, e.g. 1.48. Enter selling expenses before ✓ Administrative Expenses Earnings per Share Gross Profit Income before Income Tax Income from Operations Net Income / (Loss) Operating Expenses Other Expenses and Losses Other Revenues and Gains Revenues Selling Expenses Total Administrative Expenses Total Selling Expenses

Answer 1

A multiple-step income statement is a format used to present the financial performance of a company, separated into various categories to provide more detailed information. It includes revenues, operating expenses, income from operations, other expenses and losses, income before income tax, and net income. The earnings per share can be calculated by dividing the net income by the number of shares outstanding.

Step-by-step explanation:

A multiple-step income statement is a format used to present the financial performance of a company, separated into various categories to provide more detailed information. Here is an example of a multiple-step income statement for Windsor Shoe Co., based on the given information:

RevenuesSales Revenue$XXXOther Revenues and Gains$XXXOperating ExpensesSelling Expenses$XXXAdministrative Expenses$XXXTotal Operating Expenses$XXXIncome from Operations$XXXOther Expenses and Losses$XXXIncome before Income Tax$XXXIncome Tax Expense$XXXNet Income$XXX

In this income statement, the revenues and gains are listed first, followed by the operating expenses. The income from operations is then calculated by deducting the total operating expenses from the revenues and gains. Next, any other expenses and losses are subtracted to arrive at the income before income tax. The income tax expense is then subtracted to calculate the net income.

To calculate the earning per share, divide the net income by the number of shares outstanding. In this case, it would be $XXX divided by 20,000 shares. The answer would be $XXX per share.