Question

Marigold Corporation had net sales of $2,400,900 and interest revenue of $37,400 during 2020. Expenses for 2020 were cost of goods sold $1,466,300, administrative expenses $221,700, selling expenses $298,700, and interest expense $45,300. Marigold’s tax rate is 30%. The corporation had 100,000 shares of common stock authorized and 74,370 shares issued and outstanding during 2020. Prepare a single-step income statement for the year ended December 31, 2020. (Round earnings per share to 2 decimal places, e.g. 1.48.)

Answer 1

Net Income $284,410

Earnings Per Share $5.46

Step-by-step explanation:

Preparation of a single-step income statement for the year ended December 31, 2020.

MARIGOLD CORPORATION INCOME STATEMENT

Net Sales 2,400,900

Less: Cost of goods sold (1,466,300)

Gross Profit $934,600

(2,400,900-1,466,300)

Less: Operating Expenses

Selling Expenses (298,700)

Administrative Expenses (221,700)

Income from Operations $414,200

+/- Other Revenue and Gains, Expenses and Losses

Add : Interest Revenue 37,400

Less : Interest Expense (45,300)

Income before Income Tax $406,300

Less: Income Tax Expense 30% (121,890)

(30%*$406,300)

Net Income $284,410

Earnings Per Share $5.46

Calculation for Earnings Per Share using this formula

Earnings Per Share = Net Income ÷ Outstanding Shares

Let plug in the formula

Earnings Per Share= $406,300 ÷ 74,370 shares

Earnings Per Share= 5.463224

Earnings Per Share= $5.46 approximately

Therefore the Net Income is $284,410 while the Earnings Per Share is $5.46