Question

The trial balance for Lindor Corporation, a manufacturing company, for the year ended December 31, 2021, included the following accounts:
Account Title Debits Credits Sales revenue 2,700,000
Cost of goods sold 1,590,000
Selling and administrative expense 431,000
Interest expense 59,000
Gain on debt securities 99,000
The gain on debt securities is unrealized and classified as other comprehensive income. The trial balance does not include the accrual for income taxes. Lindor's income tax rate is 25%. There were 1,900,000 shares of common stock outstanding throughout 2021. Required: Prepare a single, continuous multiple-step statement of comprehensive income for 2021, including appropriate EPS disclosures. (Round EPS answer to 2 decimal places.)

Answer 1

Answer:

                  LINDOR CORPORATION  

             Statement of Comprehensive Income  

          For the Year Ended December 31, 2021  

Particulars                                       Amount

Sales revenue                             $2,700,000  

Less: Cost of goods sold          -$1,590,000

Gross margin                              $1,110,000

Less: Operating expenses:  

Selling & administrative exp.    -$431,000

Operating income (EBIT)            $679,000  

Other income (expenses)

Less: Interest expenses             -$59,000

Income before income tax         $620,000  

Less: Income tax expenses      -$155,000

Net income                                 $465,000

Other comprehensive income (net of tax)

Gain on debt securities A         $74,250

Comprehensive income B        $539,250

Earnings per share A/B             $0.24

Calculations of Gain on debt securities, net of tax:

Gain on debt securities before tax     $99,000  

Less: Tax     ($99,000 * 25%)             -$24,750

Gain on debt securities net of tax $74,250

*Calculation of Earnings per share:

Earnings per share  =  Net income / Number of common shares outstanding  = $465,000 / 1,900,000  

= $0.24 per share