Answer and Explanation:
The preparation of the multiple-step income statement is presented below:
Rembrandt Paint Company
Income Statement
For the Year Ended December 31, 2021
Sales revenue $24,000
Less: Cost of goods sold -$13,500
Gross profit $10,500
Less:
Operating expenses
Selling and administrative -$3,100
Restructuring costs -$1,400
Operating Income $6,000
Add: Interest revenue $220
Less: Interest expense -$420
Income from Continuing operations before income tax expense and extra ordinary item $5,800
Less: Income tax expense (25%) -$1,450
Income from Continuing operations before extraordinary item $4,350
Discontinued Operations
Income from operations of discontinued components ($3,200 - $2,200) $1,000
Less: Income tax expense (25%) $250
Income from Discontinued operations $750
Income before extraordinary items $5,100
Extraordinary item $0
Net Income $5,100
Earning per share
Income from Continuing operations before extraordinary item ($4,350 ÷ 600 shares) $7.25
Income from Discontinued operations ($750 ÷ 600 shares) $1.25
Extraordinary item 0
Net Income $8.50
We simply deduct all types of expenses and added all types of incomes
