The following is a partial trial balance for General Lighting Corporation as of December 31, 2021: Account Title Debits Credits Sales revenue 2,350,000 Interest revenue 80,000 Loss on sale of investments 22,500 Cost of goods sold 1,200,300 Loss on inventory write-down (obsolescence) 200,000 Selling expense 300,000 General and administrative expense 150,000 Interest expense 90,000 There were 160,000 shares of common stock outstanding throughout 2021. Income tax expense has not yet been recorded. The income tax rate is 25%. Required: Prepare a multiple-step income statement for 2021, including EPS disclosures. Complete this question by entering your answers in the tabs below. Prepare a multiple-step income statement for 2021, including EPS disclosures. (Round EPS answer to 2 decimal places
Reporting Cash Flows
Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows from various activities such as operating, financing, and investment. Reporting this statement is important because it is the main financial statement of the company.
Balance Sheet
A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the most critical measures of the financial performance and position of the company, and as the name suggests, the statement must balance the assets against the liabilities and equity. The assets are what the company owns, and the liabilities represent what the company owes. Equity represents the amount invested in the business, either by the promoters of the company or by external shareholders. The total assets must match total liabilities plus equity.
Financial Statements
Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It includes three main components that are balance sheet, income statement and cash flow statement.
Owner's Capital
Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expected to have either a debit balance or a credit balance, depending on the nature of the account. An asset account will have a debit balance as normal balance because an asset is a debit account. Similarly, a liability account will have the normal balance as a credit balance because it is amount owed, representing a credit account. Equity is also said to have a credit balance as its normal balance. However, sometimes the normal balances may be reversed, often due to incorrect journal or posting entries or other accounting/ clerical errors.
The following is a partial
Account Title Debits Credits
Sales revenue 2,350,000
Interest revenue 80,000
Loss on sale of investments 22,500
Cost of goods sold 1,200,300
Loss on inventory write-down (obsolescence) 200,000
Selling expense 300,000
General and administrative expense 150,000
Interest expense 90,000
There were 160,000 shares of common stock outstanding throughout 2021. Income tax expense has not yet been recorded. The income tax rate is 25%.
Required:
- Prepare a multiple-step income statement for 2021, including EPS disclosures.
Complete this question by entering your answers in the tabs below.
Prepare a multiple-step income statement for 2021, including EPS disclosures. (Round EPS answer to 2 decimal places.)
GENERAL LIGHTING CORPORATION
Income Statement
For the Year Ended December 31, 2021
Revenues and gains
_____________________________ ______________
_____________________________ _______________
_____________________________ _______________
Gross profit
Operating expenses:
_____________________________ _______________
_____________________________ _______________
_____________________________ _______________
_____________________________ _______________
______________________________ ________________
Total operating expenses _________________
________________________ _________________
_________________________ _________________
_________________________ _________________
_________________________ _________________
__________________________ _________________
total other income (expense) net
Earnings per share: ____________________
Income before income taxes ____________________
______________________________ _______________________
Net income _______________________
Earnings per share: ________________________
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