Question

The trial balance for Lindor Corporation, a manufacturing company, for the year ended December 31, 2016, included the following income accounts: Account Title Debits Credits Sales revenue 2,300,000 Cost of goods sold 1,400,000 Selling and administrative expenses 420,000 Interest expense 40,000 Unrealized holding gains on investment securities 80,000The trial balance does not include the accrual for income taxes. Lindor's income tax rate is 30%. One million shares of common stock were outstanding throughout 2016.Required:Prepare a single, continuous multiple-step statement of comprehensive income for 2016, including appropriate EPS disclosures. (Round EPS answers to 2 decimal places.)

Answer 1

Answer:

Net income = $364,000

Earning per share (EPS) = $0.36 per share.

Explanation:

A continuous multiple-step statement of comprehensive income is a form of income statement shows in a categorical and continuous manner operating income, i.e. the profit earned from the primary activities of an entity through buying and selling merchandise, other income and expenses, and net income.

For this question, continuous multiple-step statement of comprehensive income can be prepared as follows:

Lindor Corporation

Multiple-step Statement of Comprehensive Income for 2016

Details                                                                  $      

Sales revenue                                            2,300,000

Cost of goods sold                                     1,400,000

Gross profit                                                   900,000

Operating expenses:

Selling and administrative expenses         (420,000)

Operating income                                        480,000

Non operating income and exp.:

Unrealized holding gains on inv. sec.          80,000

Interest expense                                           (40,000)

Income before tax                                        520,000

Income tax (30% * $520,000)                     (156,000)

Net income                                                    364,000

EPS (364,000 / 1,000,000)                                 0.36