use the information below to answer the following question. kroeger incorporated reported the following…
use the information below to answer the following question. kroeger incorporated reported the following amounts as of december 31, 2024: sales revenue $8,220,000 interest revenue 62,000 gain on sale of investments 122,000 gain on debt securities 141,000 cost of goods sold 6,080,000 selling expense 620,000 depreciation expense 490,000 interest expense 32,000 general and administrative expense 520,000 the gain on debt securities represents the increase in the fair value of debt securities and is classified a comprehensive income. kroeger had 300,000 shares of stock outstanding throughout the year. income tax recorded. the effective tax rate is 25%. required: prepare a 2024 multiple - step income statement for kroeger incorporated with earnings per share disclosure note: round \earnings per share\ answer to 2 decimal places.
Answer
Explanation:
Step1: Calculate gross profit
Gross profit = Sales revenue - Cost of goods sold $8220000 - 6080000=2140000$
Step2: Calculate total operating expenses
Total operating expenses = Selling expense + Depreciation expense+ General and administrative expense $620000 + 490000+520000 = 1630000$
Step3: Calculate operating income
Operating income = Gross profit - Total operating expenses $2140000- 1630000 = 510000$
Step4: Calculate non - operating income
Non - operating income = Interest revenue+ Gain on sale of investments - Interest expense $62000 + 122000-32000=152000$
Step5: Calculate income before tax
Income before tax = Operating income+ Non - operating income $510000+152000 = 662000$
Step6: Calculate income tax expense
Income tax expense = Income before tax $\times$ Tax rate $662000\times0.25 = 165500$
Step7: Calculate net income
Net income = Income before tax - Income tax expense $662000 - 165500=496500$
Step8: Calculate earnings per share
Earnings per share = $\frac{Net income}{Number of shares outstanding}$ $\frac{496500}{300000}\approx1.66$
Answer:
| KROEGER INCORPORATED | |
|---|---|
| Income Statement | For the Year Ended December 31, 2024 |
| Sales revenue | $8,220,000$ |
| Cost of goods sold | $6,080,000$ |
| Gross profit | $2,140,000$ |
| Operating expenses: | |
| Selling expense | $620,000$ |
| Depreciation expense | $490,000$ |
| General and administrative expense | $520,000$ |
| Total operating expenses | $1,630,000$ |
| Operating income | $510,000$ |
| Non - operating income: | |
| Interest revenue | $62,000$ |
| Gain on sale of investments | $122,000$ |
| Interest expense | $32,000$ |
| Total non - operating income | $152,000$ |
| Income before tax | $662,000$ |
| Income tax expense | $165,500$ |
| Net income | $496,500$ |
| Earnings per share | $1.66$ |