Prepare a multiple-step income statement for 2010

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Question

Shown below is an income statement for 2010 that was prepared by a poorly trained bookkeeper of Howell Corporation.

Howell Corporation

INCOME STATEMENT

December 31, 2010

            Sales revenue                                                                                            $945,000

            Investment revenue                                                                                    19,500

            Cost of merchandise sold                                                                             (408,500)

            Selling expenses                                                                                         (145,000)

            Administrative expense                                                                                (215,000)

            Interest expense                                                                                         (13,000)

            Income before special items                                                                           183,000

            Special items

                  Loss on disposal of a component of the business                                          (30,000)

                  Major casualty loss (extraordinary item)                                                      (70,000)

            Net federal income tax liability                                                                           (24,900)

            Net income                                                                                                    $  58,100

 

Required

Prepare a multiple-step income statement for 2010 for Howell Corporation that is presented in accordance with generally accepted accounting principles (including format and terminology). Howell Corporation has 50,000 shares of common stock outstanding and has a 30% federal income tax rate on all tax related items. Round all earnings per share figures to the nearest cent.

 

Reference no: EM13488965

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