Question

The financial records of Sheffield Inc. were destroyed by fire at the end of 2020. Fortunately, the controller had kept certain statistical data related to the income statement as follows. 1. The beginning merchandise inventory was $99,360 and decreased 20% during the current year. 2. Sales discounts amount to $18,700. 3. 19,090 shares of common stock were outstanding for the entire year. 4. Interest expense was $20,400. 5. The income tax rate is 30%. 6. Cost of goods sold amounts to $460,000. 7. Administrative expenses are 20% of cost of goods sold but only 8% of gross sales. 8. Four-fifths of the operating expenses relate to sales activities. From the foregoing information prepare an income statement for the year 2020 in single-step form. (Round earnings per share to 2 decimal places, e.g. 1.48.)
SHEFFIELD INC.
Income Statement

Answer 1

Based on the information given SHEFFIELD INC. income statement is $133,630.

Income statement

SHEFFIELD INC. income statement for the year ended December 31 2020

Revenues

Net sales $1,131,300

[(20%×$460,000)÷8%-$18,700[]

Expenses

Cost of goods sold $460,000

Selling expenses $368,000

[(5×$92,000)-$92,000]

Administrative expenses $92,000

(20%×$460,000)

Interest expense $20,400

Total expense $940,400

Income before income tax $190,900

( $1,131,300-$940,400)

Income tax expense $57,270

(30%×$190,900)

Net income/Loss $133,630

($190,900-$57,270)

Earning per share $7

( $133,630/$19,090)

Inconclusion SHEFFIELD INC. income statement is $133,630.

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