Answer:
Net income = $4,860,000
<u>Earning Per Share </u>
Income From Continuing Operations ($3660/600) 6.10
Income From Discontinued Operations )$1,200/600) <u> 2.0 </u>
Net Income <u> 8.10 </u>
Explanation:
The multiple-step income statement can be described as an income statement that differentiate a company's operating revenues and operating expenses from its nonoperating revenues, nonoperating expenses, gains, and losses. It also shows gross profit separately as net sales revenue minus the cost of goods sold.
The required multiple-step income statement can be prepared as follows:
Rembrandt Paint Company
Income Statement
For the Year Ended December 31, 2021
<u>Particulars $'000 $'000 </u>
Sales revenue 25,000
Cost of goods sold <u> 14,000 </u>
Gross profit 11,000
<u>Operating expenses </u>
Selling and administrative expense (3,200)
Restructuring costs <u> (1,500) </u>
Total operating expenses <u> (4,700) </u>
Operating income 6,300
<u>Other income (expense) </u>
Interest revenue 240
Interest expense <u> (440) </u>
Net interest revenue (expense) <u> (200) </u>
Income from continuing op. b4 tax 6,100
Taxes (40% * $6,100) <u> (2,440) </u>
Income From Continuing Operations 3,660
<u>Discontinued operation </u>
Loss from op. (3,200 * (1-Tax rate)) (1,920)
Gain on disposal (5,200 * (1-Tax rate)) <u> 3,120 </u>
Income from discontinued op. <u> 1,200 </u>
Net income <u> 4,860 </u>
Number of common shares outstanding <u> 600</u>
<u>Earning Per Share </u>
Income From Continuing Operations ($3660/600) 6.10
Income From Discontinued Operations )$1,200/600 <u> 2.00 </u>
Net Income <u> 8.10 </u>