Shamrock Inc. reported income from continuing operations before taxes during 2017 of $ 2,175,000. Additional transactions occurring in 2017 but not considered in the $ 2,175,000 are as follows. 1. A gain of $ 109,000 (pretax) as a result of selling securities from its investment portfolio. 2. A $ 27,000 loss before taxes as a result of operating the discontinued clothing division during 2017. 3. A loss of $ 88,000 before taxes as a result of disposing of its clothing division. Assume that this transaction meets the criteria for discontinued operations. 4. An uninsured $ 128,000 loss due to a fire. 5. At the beginning of 2015, the corporation purchased a machine for $ 220,000 (salvage value of $ 40,000) that had a useful life of 10 years. The bookkeeper used straight-line depreciation for 2015, 2016, and 2017, but failed to deduct the salvage value in computing the depreciation base. 6. The corporation decided to change its method of inventory pricing from average-cost to the FIFO method. The effect of this change on prior years is to increase 2015 income by $ 59,000 and decrease 2016 income by $ 17,000 before taxes. The FIFO method has been used for 2017. Prepare an income statement for the year 2017 starting with income from continuing operations before taxes. Compute earnings per share as it should be shown on the face of the income statement. Common shares outstanding for the year are 450,000 shares. (Assume a tax rate of 30% on all items.) (Round earnings per share to 2 decimal places, e.g. 1.48 and all other answers to 0 decimal places, e.g. 5,275.)
Shamrock Inc. reported income from continuing operations before taxes during 2017 of $ 2,175,000. Additional transactions occurring in 2017 but not considered in the $ 2,175,000 are as follows. 1. A gain of $ 109,000 (pretax) as a result of selling securities from its investment portfolio. 2. A $ 27,000 loss before taxes as a result of operating the discontinued clothing division during 2017. 3. A loss of $ 88,000 before taxes as a result of disposing of its clothing division. Assume that this transaction meets the criteria for discontinued operations. 4. An uninsured $ 128,000 loss due to a fire. 5. At the beginning of 2015, the corporation purchased a machine for $ 220,000 (salvage value of $ 40,000) that had a useful life of 10 years. The bookkeeper used straight-line depreciation for 2015, 2016, and 2017, but failed to deduct the salvage value in computing the depreciation base. 6. The corporation decided to change its method of inventory pricing from average-cost to the FIFO method. The effect of this change on prior years is to increase 2015 income by $ 59,000 and decrease 2016 income by $ 17,000 before taxes. The FIFO method has been used for 2017. Prepare an income statement for the year 2017 starting with income from continuing operations before taxes. Compute earnings per share as it should be shown on the face of the income statement. Common shares outstanding for the year are 450,000 shares. (Assume a tax rate of 30% on all items.) (Round earnings per share to 2 decimal places, e.g. 1.48 and all other answers to 0 decimal places, e.g. 5,275.)
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter12: Fainancial Statement Analysis
Section: Chapter Questions
Problem 38MCQ
Related questions
Question
Shamrock Inc. reported income from continuing operations before taxes during 2017 of $ 2,175,000. Additional transactions occurring in 2017 but not considered in the $ 2,175,000 are as follows.
1. | A gain of $ 109,000 (pretax) as a result of selling securities from its investment portfolio. | |
2. | A $ 27,000 loss before taxes as a result of operating the discontinued clothing division during 2017. | |
3. | A loss of $ 88,000 before taxes as a result of disposing of its clothing division. Assume that this transaction meets the criteria for discontinued operations. | |
4. | An uninsured $ 128,000 loss due to a fire. | |
5. | At the beginning of 2015, the corporation purchased a machine for $ 220,000 (salvage value of $ 40,000) that had a useful life of 10 years. The bookkeeper used straight-line |
|
6. | The corporation decided to change its method of inventory pricing from average-cost to the FIFO method. The effect of this change on prior years is to increase 2015 income by $ 59,000 and decrease 2016 income by $ 17,000 before taxes. The FIFO method has been used for 2017. |
Prepare an income statement for the year 2017 starting with income from continuing operations before taxes. Compute earnings per share as it should be shown on the face of the income statement. Common shares outstanding for the year are 450,000 shares. (Assume a tax rate of 30% on all items.) (Round earnings per share to 2 decimal places, e.g. 1.48 and all other answers to 0 decimal places, e.g. 5,275.)
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 1 images
Recommended textbooks for you
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Survey of Accounting (Accounting I)
Accounting
ISBN:
9781305961883
Author:
Carl Warren
Publisher:
Cengage Learning
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Survey of Accounting (Accounting I)
Accounting
ISBN:
9781305961883
Author:
Carl Warren
Publisher:
Cengage Learning
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Financial Accounting: The Impact on Decision Make…
Accounting
ISBN:
9781305654174
Author:
Gary A. Porter, Curtis L. Norton
Publisher:
Cengage Learning