Problem 8 The trial balance of Hunter Inc included the follo

Problem 8 The trial balance of Hunter Inc. included the following accounts as of December 31, 2017: Sales revenue Interest revenue Gain on sale of investments Loss on expropriated foreign assets (event Debits Credits 1,800,000 80,000 50,000 is unusual, infrequent and material) Cost of goods sold Selling expenses Write-off of obsolete equipment Restructuring costs Interest expense General and administrative expenses 300,000 1,100,000 220,000 30,000 150,000 40,000 50,000 Hunter Inc. had 100,000 shares of stock outstanding throughout the year. Income tax expense has not yet been accrued. The effective tax rate is 30%. Prepare a single-step income statement with basic earnings per share disclosure

Solution

Hunter Inc. Income Statement For the Year Ended December 31, 2017 Sales Revenue $1,800,000 Cost of goods sold $1,100,000 Gross Profit $700,000 Operating expenses: Selling expenses $220,000 General and administrative expenses $50,000 Restructuring costs $150,000 Written off of obsolete equipment $30,000 Total operating expenses $450,000 Operating Income $250,000 Other income (expense): Gain on sale of investments $50,000 Interest revenue $80,000 Interest expense -$40,000 Total other income, net $90,000 Income before income taxes and extraordinary Items $340,000 Loss of expropriated foreign assets -$300,000 Income before income taxes $40,000 Income tax expense - 30% $12,000 Net income $28,000 Earning per share $0.28