Preparing a Single-Step and a Multiple-Step Income Statement

The following pretax information is taken from the adjusted trial balance of Trader Js Corp. at December 31, 2020, its annual year-end.

Sales revenue, net	$950,000
Gain on sale of investment	8,000
Depreciation expense	25,000
Selling expense	140,000
General and administrative expenses	92,300
Rent revenue	18,000
Investment revenue	7,000
Interest expense	9,000
Recovery from prior expropriation loss	80,000
Loss on sale of long-term investments	10,000
Cost of goods sold	550,000
Casualty loss	30,000
Average income tax rate on all items	25%
Common stock outstanding	40,000 shares

a. Prepare a single-step income statement including the earnings per share disclosures.

• Note: Record Revenues and Gains and Expenses and Losses in order from the highest dollar amount to the lowest dollar amount.
• Note: Do not use negative signs with your answers.
• Note: Round the earnings per share amount to two decimal places.

Trader J's Corporation
Income Statement
For Year Ended December 31, 2020
Revenues and gains
Sales revenue, net	Answer
Gain from recovery of expropriation loss	Answer
Rent revenue	Answer
Gain on sale of investment	Answer
Investment revenue	Answer
Total revenues and gains	Answer
Expenses and losses
Cost of goods sold	Answer
Selling expense	Answer
General and administrative expense	Answer
Casualty loss	Answer
Depreciation expense	Answer
Loss on sale of long-term investments	Answer
Interest expense	Answer
Total expenses and losses	Answer
Income before income taxes	Answer
Income tax expense	Answer
Net income	Answer
Earnings per share	Answer

b. Prepare a multiple-step income statement including the earnings per share disclosures. Assume that rent revenue is nonoperating.

• Note: Record Other Revenues and Gains and Other Expenses and Losses in order from the highest dollar amount to the lowest dollar amount.
• Note: Do not use negative signs with your answers.
• Note: Round the earnings per share amount to two decimal places.

Trader J's Corporation
Income Statement
For Year Ended December 31, 2020
AnswerCasualty lossCost of goods soldDepreciation expenseGain from recovery of expropriation lossGain on sale of investmentGeneral and administrative expensesIncome tax expenseInterest expenseInvestment revenueLoss on sale of long-term investmentsRent revenueSales revenue, netSelling expense		Answer
AnswerCasualty lossCost of goods soldDepreciation expenseGain from recovery of expropriation lossGain on sale of investmentGeneral and administrative expensesIncome tax expenseInterest expenseInvestment revenueLoss on sale of long-term investmentsRent revenueSales revenue, netSelling expense		Answer
Gross profit		Answer
Operating expenses
Selling expenses	Answer
AnswerCasualty lossCost of goods soldDepreciation expenseGain from recovery of expropriation lossGain on sale of investmentGeneral and administrative expensesIncome tax expenseInterest expenseInvestment revenueLoss on sale of long-term investmentsRent revenueSales revenue, netSelling expense	Answer
Depreciation expense	Answer
Total operating expenses		Answer
Operating income		Answer
Other revenues and gains
AnswerCasualty lossCost of goods soldDepreciation expenseGain from recovery of expropriation lossGain on sale of investmentGeneral and administrative expensesIncome tax expenseInterest expenseInvestment revenueLoss on sale of long-term investmentsRent revenueSales revenue, netSelling expense	Answer
AnswerCasualty lossCost of goods soldDepreciation expenseGain from recovery of expropriation lossGain on sale of investmentGeneral and administrative expensesIncome tax expenseInterest expenseInvestment revenueLoss on sale of long-term investmentsRent revenueSales revenue, netSelling expense	Answer
AnswerCasualty lossCost of goods soldDepreciation expenseGain from recovery of expropriation lossGain on sale of investmentGeneral and administrative expensesIncome tax expenseInterest expenseInvestment revenueLoss on sale of long-term investmentsRent revenueSales revenue, netSelling expense	Answer
AnswerCasualty lossCost of goods soldDepreciation expenseGain from recovery of expropriation lossGain on sale of investmentGeneral and administrative expensesIncome tax expenseInterest expenseInvestment revenueLoss on sale of long-term investmentsRent revenueSales revenue, netSelling expense	Answer	Answer
Other expenses and losses
AnswerCasualty lossCost of goods soldDepreciation expenseGain from recovery of expropriation lossGain on sale of investmentGeneral and administrative expensesIncome tax expenseInterest expenseInvestment revenueLoss on sale of long-term investmentsRent revenueSales revenue, netSelling expense	Answer
AnswerCasualty lossCost of goods soldDepreciation expenseGain from recovery of expropriation lossGain on sale of investmentGeneral and administrative expensesIncome tax expenseInterest expenseInvestment revenueLoss on sale of long-term investmentsRent revenueSales revenue, netSelling expense	Answer
AnswerCasualty lossCost of goods soldDepreciation expenseGain from recovery of expropriation lossGain on sale of investmentGeneral and administrative expensesIncome tax expenseInterest expenseInvestment revenueLoss on sale of long-term investmentsRent revenueSales revenue, netSelling expense	Answer	Answer
Income before income taxes		Answer
AnswerCasualty lossCost of goods soldDepreciation expenseGain from recovery of expropriation lossGain on sale of investmentGeneral and administrative expensesIncome tax expenseInterest expenseInvestment revenueLoss on sale of long-term investmentsRent revenueSales revenue, netSelling expense		Answer
Net income		Answer
Earnings per share		Answer

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