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The following incorrect income statement was prepared by the accountant of the Axel Corporation: AXEL CORPORATION Income Statement For...

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Accounting

The following incorrect income statement was preparedby the accountant of the Axel Corporation:

AXEL CORPORATION
Income Statement
For the Year Ended December 31, 2021
Revenues and gains:
Sales revenue$760,000
Interest revenue49,000
Gain on sale of investments96,000
Total revenues and gains905,000
Expenses and losses:
Cost of goods sold$410,000
Selling expense76,000
Administrative expense96,000
Interest expense33,000
Restructuring costs72,000
Income tax expense54,500
Total expenses and losses741,500
Net Income$163,500
Earnings per share$1.64


Required:
Prepare a multiple-step income statement for 2021 applyinggenerally accepted accounting principles. The income tax rate is25%. (Amounts to be deducted should be indicated with aminus sign. Round EPS answer to 2 decimal places.)
  

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Answer

PREPARE MULTISTEP INCOME STATEMENT :
Sales $     760,000
Less: Cost of goods sold -$     410,000
Gross profit $     350,000
Less: Operating expenses
Selling expenses -$     76,000
Administrative expenses -$     96,000
Restructuring costs -$     72,000 -$     244,000
Income from operation $     106,000
OTHER EXPENSES
Interest expenses -$     33,000
OTHER REVENUE
Interest & dividend $     49,000
Gain on sale of investment $     96,000 $     112,000
Income before taxes $     218,000
Less: Income tax @25% -$       54,500
Net income $     163,500
Share outstanding (163500/1.64) $       99,695
EPS   (163500/99695) $           1.64
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