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The following incorrect income statement was prepared by the accountant of the Axel Corporation:

AXEL CORPORATION
Income Statement
For the Year Ended December 31, 2013
Revenues and gains:

Sales


$ 680,000
Interest and dividends



39,000
Gain from litigation settlement



89,000







Total revenues and gains



808,000
Expenses and losses:





Cost of goods sold $ 360,000



Selling expenses
67,000



Administrative expenses
86,000



Interest
33,000



Restructuring costs
62,000



Income taxes
80,000










Total expenses and losses



688,000







Net Income


$ 120,000







Earnings per share


$ 1.20








Required:

Prepare a multiple-step income statement for 2013 applying generally accepted accounting principles. The income tax rate is 40%. The gain from litigation settlement is considered an unusual and infrequent event and the amount is material. (Amounts to be deducted should be indicated with a minus sign. Round EPS answers to 2 decimal places.)

Accounting Basics, Accounting

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  • Reference No.:- M9966226

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