Question

The following is a partial trial balance for the Green Star Corporation as of December 31, 2021: Account Title Debits Credits Sales revenue 1,800,000 Interest revenue 43,000 Gain on sale of investments 63,000 Cost of goods sold 820,000 Selling expenses 225,000 General and administrative expenses 88,000 Interest expense 53,000 Income tax expense 143,000 There were 100,000 shares of common stock outstanding throughout 2021. Required: Prepare a single-step income statement for 2021, including EPS disclosures. Prepare a multiple-step income statement for 2021, including EPS disclosures.

Answer 1

Answer:

2021 Multi Step - Income Statement

$ 1,800,000 Sales

$ 1,800,000 Net Sales Revenues

-$ 820,000 Cost of goods sold

-$ 820,000 Cost of goods sold

$ 980,000 Gross PROFIT

-$ 88,000 General and administrative expenses

-$ 225,000 Selling expenses

-$ 313,000 Operating Expenses

$ 667,000 INCOME FROM OPERATIONS

$ 63,000 Gain on sale of investments

$ 43,000 Interest Revenues

$ 106,000 Other Revenues and Gains:

-$ 53,000 Interest Expenses

-$ 53,000 Other expenses and Loss

$ 720,000 NET INCOME AFTER TAXES

-$ 143,000 Income Tax Expenses

$ 577,000 Net INCOME

$ 5,77 EPS

$ 100,000 Shares of common stock outstanding

Explanation:

In the Multistep income it's possible to segregate the operative expenses and revenues of the non operative, it also shows the gross profit, which is  

the Net Sales Revenues less the Cost of Goods Sold.  

First it's shown the Gross Profit, then substracted the operating expenses  

to arrive at operating income.  

Finally with the non operating movements we have the net Income After Taxes and with the taxes expenses we have the Net Income of the company.