Requirement: Please prepare a multiple-step income statement for Malone Corporation in proper income statement format. Must include the Earnings per share.
Malone Corporation's capital structure consists of 100,000 shares of common stock. At December 31, 2013, an analysis of the accounts and discussions with company officials revealed the following information:
Sales: $1,100,000
Purchase discounts: $18,000
Purchases: $642,000
Earthquake loss: $42,000
Selling expenses: $128,000
Cash: $55,000
Accounts receivable: $90,000
Gain on disposal of business operation: $56,500
Accumulated depreciation: $180,000
Bad debt expense: $13,000
Inventory, January 1, 2013: $152,000
Inventory, December 31, 2013: $125,000
Preferred stock: $50,000
Patents: $60,000
Retained earnings, January 1, 2013: $290,000
Write-down of inventory to lower-of-cost-or-market: $2,600
Notes payable (maturity 7/1/15): $200,000
Machinery and equipment: $450,000
Dividend revenue: $4,300
Accounts payable: $85,000
Depreciation expense - selling: $5,000
Gain on sale of available-for-sale securities: $3,800
Accrued interest payable: $1,500
Common stock: $200,000
Dividends declared on preferred stock: $2,500
Allowance for doubtful accounts: $5,000
Materials and supplies: $17,000
Depreciation expense - administrative: $10,000
Unearned service revenue: $5,000
Amortization expense on patents: $2,000
Depreciation expense error (too small from 2010): $1,400
Prepaid Insurance: $42,000
Income tax payable: $40,000
Interest expense: $17,000
General and administrative expenses: $150,000
Dividends declared on common stock: $29,000
Land: $270,000
Freight-in: $22,000
Malone's income tax rate is 30%.
