Question

The accountant of Weatherspoon Shoe Co. has compiled the following information from the company's records as a basis for an income statement for the year ended December 31, 2010.
Rental revenue $29,000
Interest expense 18,000
Market appreciation on land above cost 31,000
Wages and salaries-sales 114,800
Materials and supplies-sales 17,600
Income tax 30,600
Wages and salaries-administrative 135,900
Other administrative expenses 51,700
Cost of goods sold 516,000
Net sales 980,000
Depreciation on plant assets (70% selling, 30% administrative) 65,000
Dividends declared 16,000


There were 20,000 shares of common stock outstanding during the year.

(a) Prepare a multiple-step income statement. (Round earnings per share to 2 decimal places, e.g. 5.25. For multiple entries list from largest to smallest amounts, e.g. 10, 5, 1. Enter all amounts as positive amounts and subtract where necessary.)

Answer 1

Answer:

Attached image with the solution,

Explanation:

We will list the gross profit first

Then we subtract the two department which are part of the common operation of the company selling and adminsitrative

Then we list the orher reveneus and gain and the other expenses and losses

Last we solve for the income after taxes

We determiante the income per share by dividing the 90,400 dollar net income over the 20,000 shares outstanding

Answer 2

Answer:

                                 WEATHERSPOON SHOE C0.

                              Income Statement

                                                           $                         $  

Net Sales                                                               980,000

Cost of Goods sold                                                516,000

Gross Profit                                                             464,000

Operating Expenses:

selling expenses

materials and supplies - Sales               17,600

Wages and Salaries - Sales                 114,800

Dep on plant asset - Selling                     19500    151,900

Administrative expenses

wages and salaries  - Administrative  135,900

other administrative expenses               51,700

Dep on Plant asset - Administrative        45,500   233,100

Operating Profit                                                          79,000

Non-operating/ Other

Rental revenue                                          29,000

Interest expenses                                      18,000

Market appreciation on land above cost  31,000

Income tax                                                   30,600      11,400

Net Income                                                                     90,400

Earnings per share =  Earnings / number of common shares outstanding

                               =  $90,400/ 20,000 =  $4.52

Explanation: