Question

Presented below is information related to Metlock Corp. for the year 2020.

Net sales $1,274,000 Write-off of inventory due to obsolescence $78,400
Cost of goods sold 764,400 Depreciation expense omitted by accident in 2019 53,900
Selling expenses 63,700 Casualty loss 49,000
Administrative expenses 47,040 Cash dividends declared 44,100
Dividend revenue 19,600 Retained earnings at December 31, 2019 960,400
Interest revenue 6,860 Effective tax rate of 20% on all items
Prepare a multiple-step income statement for 2017. Assume that 62,370 shares of common stock are outstanding. (Round earnings per share to 2 decimal places, e.g. 1.49.)

Answer 1

Net Income $238,336

Earnings per share 3.82

Step-by-step explanation:

Preparation of a multiple-step income statement for 2017.

Multiple-step income statement for 2017

Sales Revenue:

Net sales 1,274,000

Less: cost of goods sold (764,400 )

Gross profit sales[A] 509,600

Operating Expenses:

Selling Expenses 63,700

Admin Expenses 47,040

Total Operating Expenses (b) 110,740

Income from Operations (a - c]=c 398,860

Other Revenue and Gains

Dividend Revenue 19,600

Interest Revenue 6,860

Total other revenues and gains(d) 26,460

Other Expenses and Losses :

Write-off of Inventory Due to Obsolescence 78,400

Casualty loss 49,000

Total Other Expenses and Losses(e) 127,400

Income before income tax(c + d -e]=f 297,920

Less: Income tax 20%(g) 59,584

Net Income(f - g) 238,336

(297,920-59,584)

Number of shares outstanding 62,370

Earnings per share 3.82

Therefore the multiple-step income statement for 2017 will be $238,336