Assignment 3 Solutions - Assignment 3 BE4- 4 Finley...

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Assignment 3 BE4- 4 Finley Corporation had income from continuing operations of $ 10,600,000 in 2010. During 2010, it disposed of its restaurant division at an after- tax loss of $ 189,000. Prior to disposal, the division operated at a loss of $ 315,000 (net of tax) in 2010. Finley had 10,000,000 shares of common stock outstanding during 2010. Prepare a partial income statement for Finley beginning with income from continuing operations. Income from continuing operations $10,600,000 Discontinued operations Loss from operation of discontinued restaurant division (net of tax) $315,000 Loss from disposal of restaurant division (net of tax) 189,000 504,000 Net income $10,096,000 Earnings per share Income from continuing operations $1.06 Discontinued operations, net of tax (0.05)* Net income $1.01 *Rounded E4- 8 ( Multiple-step Statement with Retained Earnings) Presented below is information related to Brokaw Corp. for the year 2010. Net sales $ 1,200,000 Write- off of inventory due to obsolescence $ 80,000 Cost of goods sold 780,000 Depreciation expense omitted by accident in 2009 40,000 Selling expenses 65,000 Casualty loss ( extraordinary item) before taxes 50,000 Administrative expenses 48,000 Cash dividends declared 45,000 Dividend revenue 20,000 Retained earnings at December 31, 2009 980,000 Interest revenue 7,000 Effective tax rate of 34% on all items
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(a) BROKAW CORP. Income Statement For the Year Ended December 31, 2010 Sales Revenue Net sales $1,200,000 Cost of goods sold 780,000 Gross profit 420,000 Operating Expenses Selling expenses $65,000 Administrative expenses 48,000 113,000 Income from operations
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Assignment 3 Solutions - Assignment 3 BE4- 4 Finley...

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