Question 3BE - Intermediate Accounting (Kieso)

Question

Using the information provided in BE4-2, prepare a condensed multiple-step income statement for Brisky Corporation

Step-by-Step Solution

Answer

The net income for the company is $310,800.

Meaning of multiple-step income statement

This is a type of statement that a company uses to provide a clearer picture of income generated from the business operations for both operating and non-operating sections.

Preparing multiple-step income statement for Brisky Corporation

Brisky Corporation
Income Statement
For the Year Ended December 31, 2017
Net Sales	$2,400,000
Cost of Goods Sold	$1,450,000
Gross Profits	$950,000
Less: Expenses
Selling Expenses	$280,000
Administrative Expenses	$212,000
Total Expenses	$492,000
Income From Operations	$458,000
Other Revenue and Gains
Interest Revenue	$31,000
Other Expenses and Losses
Interest Expense	$45,000
Interest before Income Tax	$444,000
Income Tax Expense	$133,200
Net Income	$ 310,800
Earnings per share	$4.44

Working Note

1. Calculation of Earnings per share

$\begin{array}{rcl}\mathrm{Earning} \mathrm{per} \mathrm{share}& =& \frac{\mathrm{Net} \mathrm{income}}{\mathrm{Outstanding} \mathrm{common} \mathrm{stock}}\\ & =& \frac{\$310,800}{70,000 \mathrm{Shares}}\\ & =& \$4.44\end{array}$