Question

Question 3 _(14 marks) Prepare a single-step income statement for 2010 showing operating expenses by nature (type). Include EPS calculation. Pengelly has 10,000 common shares outstanding. Pengelly Corp. had net sales of $2,780,000 and investment revenue of $103.000 in 2010. Its 2010 expenses were as follows: Cost of Goods Sold Wages-Salespeople Advertising & Promotion Entertainment Selling Expenses $2,190,000 175,000 60,000 37,000 $ 272,000 Wages-Admin Rent Utilities Administrative Expenses $142,000 48,000 21.000 $211,000 Interest expense $76,000 Income tax expense $40,000

Answer 1

Single step income statement

Sales revenue		2780000
Investment revenue		103000
Total revenue		2883000
Less: Expense
Cost of goods sold	2190000
Wages-Salespeople	175000
Advertising & Promotion	60000
Entertainment	37000
Wages-admin	142000
Rent	48000
Utilities	21000
Interest expense	76000
Income tax expense	40000
Total expense		2789000
Net income		94000
Share outstanding		10000
EPS		9.40