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Week+3+Team+Assignment - Income before tax Income...

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Income before tax 798,500 Income tax (30%)(less $64,000 non-taxable gain) 220,350 Income from continuing operations 578,150 Discontinued operations Loss on disposal on recreational division (115,000) Applicable income tax (30%) 34,500 (80,500) Income before extraordinary item 497,650 Extraordinary item-flood loss(less 46% income tax) (43,200) Net Income $454,450 Per share of common stock Income from continuing operations $7.23 Loss on disposal of disposed operation, net of tax (1.01) Income before extraordinary item 6.22 Extraordinary loss, net of tax (.54) Net income $5.68 E18-15 (Installment-Sales Method and Cost Recovery) Kenny Corp., a capital goods manufacturing business that started on January 4, 2007, and operates on a calendar-year basis, uses the installment-sales method of profit recognition in accounting for all its sales. The following data were taken from the 2007 and 2008 records. 2007 2008 Installment sales $480,000 $620,000 Gross profit as a percent of costs 25% 28% Cash collections on sales of 2007 $140,000 $240,000 Cash collections on sales of 2008 –0– $180,000
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