The accountant of the axel corporation

Question

Extraordinary gain

Net Income

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				$	640,000
Interest and dividends					35,000
Gain from litigation settlement					85,000
Total revenues and gains					760,000
Expenses and losses:
Cost of goods sold	$	345,000
Selling expenses		62,000
Administrative expenses		84,000
Interest		30,000
Restructuring costs		59,000
Income taxes		72,000
Total expenses and losses					652,000
Net Income				$	108,000
Earnings per share				$	1.08

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.)