LT Assignment week 3 finished project 1 upload - Note Accounting Changes at the bottom of Page Income from continuing operations Loss on sale of

Note- Accounting Changes at the bottom of Page Income from continuing operations $790,000 Loss on sale of security $(57,000) Gain on insurance policy 64,000 Error in computation of deprecation Previously stated (salvage value amount) $9,000 Corrected amount (54,000 -9000=45,000/6) 7,500 $1,500 Income from continuing operations before income tax $798,500 Income from continuing operations before income tax $798,500 Non-taxable income from insurance policy 64,000 Taxable Income 734,500 Income tax rate (30%) 30% Income tax expense $220,350 Income from Continuing operations $798,500 Income Tax $220,350 Income from Continuing operations $578,150 Loss on disposal of recreational division $115,000 Less : applicable income tax (30%) 34,500 $80,500 Income before extraordinary items $497,650 Extraordinary items Loss on flood less applicable tax $80,000 Less applicable tax (46%) 36,800 $43,200 Net Income $454,450 Net Income Per Share Oustanding Income from continuing operations (578,150/ 80,000) $7.23 Income from discontinued operations (80,500/80,000) -1.01 Income from extraordinary items (43,200 /80,000) -0.54 Net income per share $5.68 Changes in Accounting Principles Average Cost FIFO 2005 60,000 $60,000 2006 -20,000 $(20,000) Total $40,000 Excess of FIFO over Average Cost