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Brief Exercise 4-3
Buffalo Corporation had net sales of $2,406,100 and interest revenue of $33,400 during 2017. Expenses for 2017 were cost of goods sold $1,450,300, administrative expenses $214,900, selling expenses $290,300, and interest expense $46,200. Buffalo’s tax rate is 30%. The corporation had 102,100 shares of common stock authorized and 70,750 shares issued and outstanding during 2017. Prepare a condensed multiple-step income statement for Buffalo Corporation. (Round earnings per share to 2 decimal places, e.g. 1.48.)
| BUFFALO CORPORATION Income Statement  December 31, 2017For the Year Ended December 31, 2017For the Quarter Ended December 31, 2017 |
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| DividendsEarnings Per ShareExpensesGross Profit / (Loss)Income Before Income TaxIncome From OperationsNet Income / (Loss)Net SalesRetained Earnings, January 1Retained Earnings, December 31RevenuesTotal ExpensesTotal RevenuesOther Revenues and GainsOther Expenses and Losses |
$ |
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| Dividends Earnings Per Share Expenses Gross Profit / (Loss) Income Before Income Tax Income From Operations Net Income / (Loss) Net Sales Retained Earnings, January 1 Retained Earnings, December 31 Revenues Total Expenses Total Revenues Other Revenues and Gains Other Expenses and Losses |
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$ |
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| DividendsEarnings Per ShareExpensesGross Profit / (Loss)Income Before Income TaxIncome From OperationsNet Income / (Loss)Net SalesRetained Earnings, January 1Retained Earnings, December 31RevenuesTotal ExpensesTotal RevenuesOther Revenues and GainsOther Expenses and Losses |
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| DividendsEarnings Per ShareExpensesGross Profit / (Loss)Income Before Income TaxIncome From OperationsNet Income / (Loss)Net SalesRetained Earnings, January 1Retained Earnings, December 31RevenuesTotal ExpensesTotal RevenuesOther Revenues and GainsOther Expenses and Losses |
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| DividendsEarnings Per ShareExpensesGross Profit / (Loss)Income Before Income TaxIncome From OperationsNet Income / (Loss)Net SalesRetained Earnings, January 1Retained Earnings, December 31RevenuesTotal ExpensesTotal RevenuesOther Revenues and GainsOther Expenses and Losses |
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| DividendsEarnings Per ShareExpensesGross Profit / (Loss)Income Before Income TaxIncome From OperationsNet Income / (Loss)Net SalesRetained Earnings, January 1Retained Earnings, December 31RevenuesTotal ExpensesTotal RevenuesOther Revenues and GainsOther Expenses and Losses |
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| DividendsEarnings Per ShareExpensesGross Profit / (Loss)Income Before Income TaxIncome From OperationsNet Income / (Loss)Net SalesRetained Earnings, January 1Retained Earnings, December 31RevenuesTotal ExpensesTotal RevenuesOther Revenues and GainsOther Expenses and Losses |
$ |
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| DividendsEarnings Per ShareExpensesGross Profit / (Loss)Income Before Income TaxIncome From OperationsNet Income / (Loss)Net SalesRetained Earnings, January 1Retained Earnings, December 31RevenuesTotal ExpensesTotal RevenuesOther Revenues and GainsOther Expenses and Losses |
$ |
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Expert Answer
Solution :- Income statement
| Particulars | Amount ($) |
| Sales revenue
Interest revenue |
2406100
33400 |
| Total revenue (A) | 2439500 |
| Cost of goods sold expense
Administrative expense Selling expense Interest expense |
1450300
214900 290300 46200 |
| Total expenses (B) | 2001700 |
| Income before income tax = (A) – (B)
(-) income tax (30 % of 437800) |
437800
131340 |
| Net income | 306460 |
| Earnings per share = 306460 / 70750 | 4.33 |
Conclusion :- Net income = $ 306460 and Earnings per share = $ 4.33 (approx).
