Income from continuing operations 15372500 Discontinued operations Loss before

Income from continuing operations 15372500

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      Income from continuing operations 15,372,500       Discontinued operations             Loss before income tax $3,225,000             Less: Applicable income tax (35%)       1,128,750         (2,096,250)       Net income $13,276,250 Preferred dividends declared: $  1,075,000 Weighted average common shares outstanding 4,000,000 Earnings per share       Income from continuing operations $3.57*       Discontinued operations, net of tax         (.52 )**       Net income $3.05 ***    *($15,372,500 – $1,075,000)  ÷  4,000,000. (Rounded)   **$2,096,250  ÷  4,000,000. (Rounded) ***($13,276,250 – $1,075,000)  ÷  4,000,000.
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EXERCISE 4-14 (15–20 minutes) (a)     2014         Income before income tax $450,000 Income tax (35%)   157,500 Net Income $292,500 (b) Cumulative effect for years prior to 2014. Year Weighted- Average     FIFO          Difference Tax Rate    (35%)        Net Effect 2012 $370,000 $395,000 $25,000 2013 390,000 430,000    40,000 Total $65,000 $22,750 $42,250 (c)       2014                 2013                 2012           Income before income tax $450,000 $430,000 $395,000 Income tax (35%)    157,500    150,500    138,250 Net income $292,500 $279,500 $256,750
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