Question

Pronghorn Corporation had net sales of $2,417,100 and interest revenue of $37,500 during 2017. Expenses for 2017 were cost of goods sold $1,452,900, administrative expenses $221,200, selling expenses $282,700, and interest expense $45,100. Pronghorn’s tax rate is 30%. The corporation had 105,100 shares of common stock authorized and 72,270 shares issued and outstanding during 2017. Prepare a single-step income statement for the year ended December 31, 2017.

Answer 1

Answer and Explanation:

The preparation of the single-step income statement is presented below:

Revenue:

Net Sales $2,417,100

Add: Interest Revenue $37,500

Total Revenue $2,454,600

Less: Expenses

Cost of Goods Sold -$1,452,900

Administrative Expenses -$221,200

Selling Expenses -$282,700

Interest Expenses -$45,100

Tax rate at 30% -$135,810 ($452,700 × 30%)

Net Income $316,890

Earning per share $4.39 ($316,890 ÷ 72,270 shares)

We simply deduct the all expenses from the revenues so that the net income could come

And, the $452,700 is come from

= $2,454,600 - $1,452,900 - $221,200 - $282,700 - $45,100

= $452,700