Question

The following information is available for Windsor Inc. for the year ended December 31, 2017:_______.

Loss on discontinued operations $66,000 Retained earnings January 1, 2017 $1,260,000
Rent revenue 98,000 Selling expenses 876,000
Income tax applicable to continuing operations 297,000 Income tax applicable to loss on discontinued operations 23,000
Administrative expenses 507,000 Cost of goods sold 1,648,000
Loss on write-down of inventory 37,000 Sales revenue 3,775,000
Gain on sale of equipment 31,000 Cash dividends declared 230,000
Unrealized gain on available-for-sale securities 27,000 Interest expense 57,000
200,000 shares were outstanding during all of 2017.

Answer 1

Requirement

Prepare Income statement

Calculate the per share of common stock

Windsor Inc.

Income statement for the year ended December 31, 2017

Sales $3,775,000

Less: Cost of goods sold $1,648,000

Gross profit $2,127,000

Operating expenses

Selling expenses $876,000

Administrative expenses $507000

Total operative expenses $1,383,000

Operative income $744,000

Other revenues and (expenses):

Rent revenue $98000

Gain on sale of equipment $31000

Interest expenses ($57,000) $72,000

Income before income taxes $816,000

Income tax applicable to continuing $297,000

operations

income from continuing operations $519,000

Discontinued operations:

Loss on discontinued operations ($66000)

Income tax applicable to loss on ($23,000)

discontinued operations

Total discontinued operations $89,000

Income before extraordinary item $430,000

Extraordinary item:

Loss on write-down of inventory ($37000)

Income after extraordinary item $393,000

Other comprehensive income:

Unrealized gain on available-for-sale securities $27,000

Comprehensive Income $420,000

EPS = Net Income of a company / Outstanding Shares

EPS = $420,000/200,000

EPS = $2.1 per share