Q8BP Prepare an income statement for ... [FREE SOLUTION]

91影视

Foundations Of Financial Management

Stanley B. Block, Geoffrey A. Hirt, Bartley Danielsen

Business Studies

16th Edition 路 768 pages

ISBN: 9781259277160

Chapter 2: Q8BP (page 49)

Prepare an income statement for Franklin Kite Co. Take your calculations all the way to computing earnings per share.
Sales
$900,000
Shares outstanding
50,000
Cost of goods sold
400,000
Interest expenses
40,000
Selling and administration expenses
60,000
Depreciation expenses
20,000
Preferred stock dividend
80,000
Taxes
50,000

Short Answer

Expert verified

The earning per share is $5.

Step by step solution

Earning per share

Earning per share is computed to know the company鈥檚 earnings for each share of its stockand is widely used by the users of the organization for estimating the corporate values.

Income statement for Franklin Kite Co.

Particulars	Amount ($)
Sales	900,000
Less: Cost of goods sold	400,000
Gross profit	500,000
Less: Selling and administrative expenses	60,000
Less: Depreciation expenses	20,000
Less: Interest Expenses	40,000
Operating income	380,000
Less:Taxes	50,000
Net income after tax	330,000
Less: Preferred stock dividend	80,000
Income available for shareholders	250,000
No. of shares outstanding	50,000
Earnings per Share	5

Unlock Step-by-Step Solutions & Ace Your Exams!

Full Textbook Solutions
Get detailed explanations and key concepts
Unlimited Al creation
Al flashcards, explanations, exams and more...
Ads-free access
To over 500 millions flashcards
Money-back guarantee
We refund you if you fail your exam.

Over 30 million students worldwide already upgrade their learning with 91影视!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Recommended explanations on Business Studies Textbooks

View all explanations

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Lancaster corporation
Sales	\(246,000
Cost of goods sold	122,000
Gross profit	\)124,000
Fixed charges (other than interest)	27,500
Income before interest and taxes	\(96,500
Interest	21,800
Income before taxes	\)74,700
Taxes (35%)	26,145
Income after taxes	$48,555

	20X1	20X2
Sales	\(8,000,000	\)10,000,000
Cost of goods sold	6,000,000	9,000,000
Inventory	800,000	1,000,000

91影视

Short Answer

Step by step solution

Earning per share

Income statement for Franklin Kite Co.

One App. One Place for Learning.

Most popular questions from this chapter

Recommended explanations on Business Studies Textbooks

Strategic Direction

Corporate Finance

Project Planning & Management

Managerial Economics

Organizational Communication

Human 91影视

Study anywhere. Anytime. Across all devices.

Sales	$900,000
Shares outstanding	50,000
Cost of goods sold	400,000
Interest expenses	40,000
Selling and administration expenses	60,000
Depreciation expenses	20,000
Preferred stock dividend	80,000
Taxes	50,000

Taxes	Earning per share
Share Outstanding	Earning before taxes
Interest Expense	Cost of goods sold
Depreciation Expense	Earning after taxes
Preferred Stcok dividends	Earning available to common stockholders
Sales	Selling and administrative expense
Gross profit