Question

Two accountants for the firm of Elwes and Wright are arguing about the merits of presenting an income statement in a multiple-step versus a single-step format. The discussion involves the following 2017 information related to Flounder Company ($000 omitted). Administrative expense     Officers' salaries $5,297     Depreciation of office furniture and equipment 4,357 Cost of goods sold 60,967 Rent revenue 17,627 Selling expense     Delivery expense 3,087     Sales commissions 8,377     Depreciation of sales equipment 6,877 Sales revenue 96,897 Income tax 9,467 Interest expense 2,257 Common shares outstanding for 2017 total 40,550 (000 omitted).

FLOUNDER COMPANY Income Statement or the Year Ended December 31, 2017 (In thousands, except earnings per share) 19689 096 593 ales Revenu ost of Goods Sol ross Profit (Loss) perating Expense elling Expense elivery Expense ales Commissi epreciation Expen:s otal Expenses dministrative Expense alaries and Wages Expense epreciation Expen:s Income From Operations 08 37 87 $18341 29 357 27995 7935 Other Revenues and Gain 17627 ent Revenu 25562 ther Expenses and Losse nterest Expens ncome Before Income Tax ncome Tax Expens et Income (Loss) 25 3305 46 $1383 0.63 arnings Per Shar

(b)

The parts of this question must be completed in order. This part will be available when you complete the part above.

Answer 1

Explanation for Income statement:

Earning per share = Net Income /Out standing shares

= 13,838 / 40,550

Earning per share = 0.34

1. Gross profit = Sales Revenue - Cost of goods sold
2. Total operating Expenses = Total Selling expenses + Administrative Expense
3. Income from operations = Gross profit - Total operating expense
4. Net Income = (Income from operations + Non operation Income) - Non operative Expense