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.)
|