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The following is a partial trial balance for General Lighting Corporation as of December 31, 2021: Account Title Debits Credits Sales revenue 2,450,000 Interest revenue 82,000 Loss on sale of investments 23,500 Cost of goods sold 1,210,000 Loss on inventory write-down (obsolescence) 220,000 Selling expense 320,000 General and administrative expense 160,000 Interest expense 81,000 There were 300,000 shares of common stock outstanding throughout 2021. Income tax expense has not yet been recorded. The income tax rate is 25%. Required: Prepare a single-step income statement for 2021, including EPS disclosures. Prepare a multiple-step income statement for 2021, including EPS disclosures.

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hamzatauseef

Answer:

See Explanation and attached files.

Explanation:

First lets summarize the information clearly.

Trial Balance Credits

Sales  $2,450,000

Interest Revenue  $82,000

Trial Balance Debits

Loss on Investment  23500

Cost of goods  1210000

Loss on inventory   220,000

Selling   320,000

General & Admin 160,000

Interest 81,000

Single Step Statement

See attached file

Multi Step Statement

See attached file

Note that tax calculated in single step is after expenses.

The EPS disclosure is as follows

Net income / Total outstanding equity

This gives us,  388125 / 300000 = $1.29375 / share for both instances due to tax having being calculated the same way.

Hope that helps.

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