Question

The trial balance for Lindor Corporation, a manufacturing company, for the year ended December 31, 2016, included the following income accounts: Account Title Debits Credits Sales revenue 2,720,000 Cost of goods sold 1,600,000 Selling and administrative expenses 440,000 Interest expense 60,000 Unrealized holding gains on investment securities 100,000 The trial balance does not include the accrual for income taxes. Lindor's income tax rate is 30%. 2 million shares of common stock were outstanding throughout 2016. Required: Prepare a single, continuous multiple-step statement of comprehensive income for 2016, including appropriate EPS disclosures. (Round EPS answers to 2 decimal places.)

Answer 1

Answer and Explanation:

The preparation of the single, continuous multiple-step statement of comprehensive income for 2016 is presented below;

Sales revenue $2,720,000

Less; cost of goods sodl $1,600,000

Gross profit $1,120,000

Less:

Operating expense

Selling and administrative expenses -$440,000

Operating income $680,000

Less: interest expense -$60,000

Income before income tax $620,000

Less: income tax expense (25% of $620,000) -$155,000

Net income $465,000

Other comphrensive income

Gain on debt securities (75% of $100,000) $75,000

Comphrensive income $540,000

Earning per share ($465,000 ÷ 2,000,000 shares) $0.23