Question

The following is a partial trial balance for the Green Star Corporation as of December 31, 2021:

Account Title	Debits	Credits
Sales revenue		1,750,000
Interest revenue		42,000
Gain on sale of investments		62,000
Cost of goods sold	810,000
Selling expenses	220,000
General and administrative expenses	87,000
Interest expense	52,000
Income tax expense	142,000

There were 150,000 shares of common stock outstanding throughout 2021.

Required:

1. Prepare a single-step income statement for 2021, including EPS disclosures.

2. Prepare a multiple-step income statement for 2021, including EPS disclosures.

Answer 1

A)

Green Star Corporation INCOME STATEMENT FOR THE YEAR ENDED December 31, 2021
Revenue
sales revenue	1750000
Interest revenue	42000
Gain on sale of investment	62000
Total revenue		1854000
expenses
cost of goods sold	810000
selling expense	220000
general and administrative expense	87000
Interest expense	52000
Total expense		(1169000)
Income before income tax		685000
less:Income tax expense		(142000)
Net income		543000
EPS disclosure
Earning per share	543000/150000 =$ 3.62 per share

b)

Green Star Corporation INCOME STATEMENT FOR THE YEAR ENDED December 31, 2021
sales revenue		1750000
less:cost of goods sold		-810000
Gross margin		940000
less:Selling ,General and administrative expense
selling expense	220000
General and administrative expense	87000
Total Selling ,General and administrative expense		(307000)
Operating income		633000
other income /(expense)
Interest revenue	42000
Gain on sale of investment	62000
Interest expense	-52000
Total other income/(expense)		52000
Income before income tax expense		685000
less:income tax expense		-142000
Net income		543000
Earning per share	543000/150000 =$ 3.62 per share

Earning per share =[net income -preferred dividend paid if any]/number of common shares outstanding