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    Income Statement Preparation - Beckstrom Corporation

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    The following selected information is taken from the records of Beckstrom Corporation.
    Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . $ 35,000
    Accounts receivable . . . . . . . . . . . . . . . . . . . . . . 65,000
    Advertising expense . . . . . . . . . . . . . . . . . . . . . . 15,000
    Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,500
    Supplies expense . . . . . . . . . . . . . . . . . . . . . . . . 46,000
    Rent expense . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000
    Utilities expense . . . . . . . . . . . . . . . . . . . . . . . . . 3,000
    Income taxes (30% of income before taxes) . . . . ?
    Miscellaneous expense . . . . . . . . . . . . . . . . . . . . 4,400
    Owners' equity . . . . . . . . . . . . . . . . . . . . . . . . . . 140,000
    Salaries expense . . . . . . . . . . . . . . . . . . . . . . . . . 61,000
    Fees (revenues) . . . . . . . . . . . . . . . . . . . . . . . . . 384,000
    1. Prepare an income statement for the year ended December 31, 2006. (Assume that 7,500
    shares of stock are outstanding.)
    2. Explain what the EPS ratio tells the reader about Beckstrom Corporation.

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    Solution Preview

    Income Statement Preparation
    The following selected information is taken from the records of Beckstrom Corporation.
    Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . $ 35,000
    Accounts receivable . . . . . . . . . . . . . . . . . . . . . . 65,000
    Advertising expense . . . . . . . . . . . . . . . . . . . . . . 15,000
    Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,500
    Supplies ...

    Solution Summary

    This solution is to prepare an income statement for the year ended December 31, 2006 and explain what the EPS ratio tells the reader about Beckstrom Corporation.

    $2.19

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