Question

Sunland Corporation had net sales of $2,425,800 and interest revenue of $38,200 during 2020. Expenses for 2020 were cost of goods sold $1,458,200, administrative expenses $212,600, selling expenses $282,100, and interest expense $46,400. Sunland’s tax rate is 30%. The corporation had 109,600 shares of common stock authorized and 70,210 shares issued and outstanding during 2020. Prepare a single-step income statement for the year ended December 31, 2020

Answer 1

Answer:

Net income $336,750

Earnings per share 4.79

Explanation:

Preparation of Sunland Corporation Income Statement

SUNLAND CORPORATION Income Statement For the Year Ended December 31, 2020

Revenues Net sales $2,425,800

Interest revenue $38,200

Total revenues $2,464,000

Expenses Cost of goods sold $1,458,200

Selling expenses $282,100

Administrative expenses $212,600

Interest expense $46,400

Income tax expense $127,950

Total expenses $2,127,250

Net income $336,750

($2,464,000-$2,127,250)

Earnings per share 4.79

($336,750÷$70,210 shares)

Calculation for Income tax expenses

($2,425,800 – $1,458,200 – $282,100 – $212,600 – $46,400)

=426,500×30%=$127,950

Therefore SUNLAND CORPORATION the Net income is $336,750 and the Earnings per share is 4.79