Homework SourseRembrandt Paint Company had the following income statement i
Rembrandt Paint Company had the following income statement items for the year ended December 31, 2016 ($ in 000s): Net sales $ 31,000 Cost of goods sold $ 17,000 Interest income 330 Selling and administrative expenses 3,800 Interest expense 610 Restructuring costs 2,100 In addition, during the year the company completed the disposal of its plastics business and incurred a loss from operations of $2.9 million and a gain on disposal of the component’s assets of $4.6 million. 600,000 shares of common stock were outstanding throughout 2016. Income tax expense has not yet been recorded. The income tax rate is 40% on all items of income (loss). Required: Prepare a multiple-step income statement for 2016, including EPS disclosures. (Amounts to be deducted should be indicated with a minus sign. Enter your answers in thousands except earnings per share. Round EPS answers to 2 decimal places.)
Solution
Rembrandt Paint Company
Multiple step Income Statement
For the year ended December 31, 2016 ($\'000)
EPS = Net income/Number of shares
= 5,712,000/600,000
= $9.52
| Sales | 31,000 |
| Less: Cost of goods sold | -17,000 |
| Gross profit | 14,000 |
| Operating expenses: | |
| Selling and administrative expenses | - 3,800 |
| Total operating expenses | - 3,800 |
| Operating income | 10,200 |
| Other incomes and expenses : | |
| Interest income | 330 |
| Interest expense | - 610 |
| Restructuring costs | -2,100 |
| Loss on disposal of plastic business | -2,900 |
| Gain on disposal of component\'s assets | 4,600 |
| Income before tax | 9,520 |
| Income tax @ 40% | - 3,808 |
| Net income | 5,712 |
