Exercise 2:During year 2021, Jackson Ltd. obtained an income after taxes from continuing activities of $877,000During the month of February 2021, the company decided to sell a segment of activity. The segment generated losses before taxes prior to its disposal for$61,000.The sale of the assets of the segment implied a gain before taxes of $10,000In May 2021, an earthquake destroyed a facilities of the compamy causing losses for $40,000Finally, the accountant of the company decided to change the depreciation method of the assets from double declining balance tostraight line method. Thisimplied an additional income of $30,000Tax rate is 25%.1.- Prepare the income statement of the company and calculate the net income obtained in 20212.- Prepare the earning per share figure for each section of the income statement taking into account that the company had an average of 40,000 shares ofcommon stocks outstanding throughout year 2021, and 8% preferred stocks outstanding for a total amount of $100,000.

Particulars Amount ($) Income from continuing activities after taxes 877,000 Add:…

1.- Prepare the income statement of the company and calculate the net income obtained in 2021 2.- Prepare the earning per share figure for each section of the income statement taking into account that the company had an average of 40,000 shares of common stocks outstanding throughout year 2021, and 8% preferred stocks outstanding for a total amount of $100,000.

1.- Prepare the income statement of the company and calculate the net income obtained in 2021 2.- Prepare the earning per share figure for each section of the income statement taking into account that the company had an average of 40,000 shares of common stocks outstanding throughout year 2021, and 8% preferred stocks outstanding for a total amount of $100,000.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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