Question

Rembrandt Paint Company had the following income statement items for the year ended December 31, 2021 ($ in thousands):

Sales revenue 34,000 Cost of goods sold 18,500
Interest revenue 420 Selling and administrative expense 4,100
Interest expense 620 Restructuring costs 2,400
In addition, during the year the company completed the disposal of its plastics business and incurred a loss from operations of $3.2 million and a gain on disposal of the component’s assets of $5.2 million. 600,000 shares of common stock were outstanding throughout 2021. Income tax expense has not yet been recorded. The income tax rate is 25% on all items of income (loss).
Required:
Prepare a multiple-step income statement for 2021, including EPS disclosures. (Amounts to be deducted should be indicated with a minus sign. Enter your answers in thousands except earnings per share. Round EPS answers to 2 decimal places.)

Answer 1

Rembrandt Paint Company

Income Statement - December 31, 2021

Sales revenues $34,000

- Cost of goods sold ($18,500)

Gross margin $15,500

Operating expenses:

- Selling and adm. expenses ($4,100)

- Restructuring costs ($2,400)

Total operating expenses ($6,500)

Income from operations $9,000

Other revenue and expenses:

Gain on sales of assets $5,200

Interest revenue $420

Loss from discontinued oper. ($3,200)

Interest expense ($620)

Total other revenue and expenses $1,800

Net income pre-tax $10,800

Income taxes (25%) ($2,700)

Net income after taxes $8,100

Shares outstanding 600,000

Earnings per share (EPS) $13.50