The following incorrect income statement was prepared by the accountant of the Axel Corporation: AXEL CORPORATION Income Statement For the Year Ended December 31, 2018 Revenues and gains: Sales $592,000 Interest and dividends 32,000 Gain on sale of investments 86,000 Total revenues and gains 710,000 Expenses and losses: Cost of goods sold$325,000 Selling expenses 67,000 Administrative expenses 87,000 Interest 26,000 Restructuring costs 55,000 Income taxes 60,000 Total expenses and losses 620,000 Net Income $90,000 Earnings per share $0.90 Required: Prepare a multiple-step income statement for 2018 applying generally accepted accounting principles. The income tax rate is 40%.

$90,000

Explanation:

AXEL CORPORATION

Income Statement For the Year Ended December 31, 2018

Sales revenue $ 592,000

Less:Cost of goods sold 325,000

Gross profit 267,000

Operating expenses:

Selling $67,000

Administrative 87,000

Restructuring costs 55,000

Total operating expenses 209,000

Operating income (267,000-209,000) 58,000

Other income (expense):

Interest and dividends 32,000

Interest expense(26,000)

Gain on sale of investments 86,000

Income before income taxes (86,000+32,000+58,000-26,000) 150,000

Income tax expense [40% x $150,000]60,000

Net income(150,000-60,000) 90,000

Earnings per share [90$/100$=0.9]$ 0.90

Numbers of share outstanding 90,000/0.9 =$100,000

steering wheels are always situated on the left side of the car.

always drive on the right side of the road.

white lines separate lanes of traffic traveling the same direction.

hashed or broken lines means you may change lanes when it is safe.

solid white lines mean stay in your lane.

yellow lines separate traffic moving in opposing directions.

hashed or broken yellow lines mean you can carefully pass, paying attention to oncoming traffic.

never cross a solid yellow line (or double yellow line).

when turning left at an intersection, pass in front of any cars that are turning left from the opposing direction (do not try to pass behind them).

use the left lane to pass other cars traveling your direction.

do not pass in the right lane unless absolutely necessary.

if you are driving in the far left hand lane and someone would like to pass you, move over to the right lane when it is safe to do so and allow them to pass.

you must always yield to pedestrians.

come to a complete stop whenever you see pedestrians trying to cross the street.

never pass a school bus if it has flashing red lights. wait until the lights have stopped.

be aware of bicyclists. often they share the road with cars and are supposed to also follow general traffic laws.

be particularly careful about driving in cities with bike lanes -- always check before turning that a bike is not coming.

it is mandatory to pull over or stop at an intersection to allow an emergency vehicle to pass you if you see one traveling with lights flashing and/or a siren running.

do not overuse your car horn. horns are used almost exclusively for emergency situations or for when you feel unsafe.

explanation:

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