Questions: Tamarisk Corporation had net sales of 2,407,700 and interest revenue of 40,700 during 2025. Expenses for 2025 were cost of goods sold 1,462,900, administrative expenses 220,600, selling expenses 299,400, and interest expense 54,000. Tamarisk's tax rate is 30%. The corporation had 105,200 shares of common stock authorized and 57,610 shares issued and outstanding during 2025. Prepare a single-step income statement for the year ended December 31, 2025. (Round earnings per share to 2 decimal places, es 1.48.)

Solution Steps

To prepare a single-step income statement, we need to follow these steps:

1. Calculate the total revenues by summing net sales and interest revenue.
2. Calculate the total expenses by summing cost of goods sold, administrative expenses, selling expenses, and interest expense.
3. Subtract total expenses from total revenues to get the income before tax.
4. Calculate the tax expense by multiplying the income before tax by the tax rate.
5. Subtract the tax expense from the income before tax to get the net income.
6. Calculate the earnings per share (EPS) by dividing the net income by the number of shares outstanding.

The total revenues are calculated by summing the net sales and interest revenue: \[ \text{Total Revenues} = \$2,407,700 + \$40,700 = \$2,448,400 \]

The total expenses are calculated by summing the cost of goods sold, administrative expenses, selling expenses, and interest expense: \[ \text{Total Expenses} = \$1,462,900 + \$220,600 + \$299,400 + \$54,000 = \$2,036,900 \]

The income before tax is calculated by subtracting the total expenses from the total revenues: \[ \text{Income Before Tax} = \$2,448,400 - \$2,036,900 = \$411,500 \]

The tax expense is calculated by multiplying the income before tax by the tax rate: \[ \text{Tax Expense} = \$411,500 \times 0.30 = \$123,450 \]

The net income is calculated by subtracting the tax expense from the income before tax: \[ \text{Net Income} = \$411,500 - \$123,450 = \$288,050 \]

The earnings per share (EPS) is calculated by dividing the net income by the number of shares outstanding: \[ \text{EPS} = \frac{\$288,050}{57,610} \approx 5.00 \]

Final Answer