Homework Help is Here – Start Your Trial Now!
Business
Accounting
Eastern Aviation operated both an airline and several restaurants located near airports. During the year just ended, all restaurant operations were discontinued and the following operating results were reported. Continuing operations (airline): Net sales Costs and expenses Other data: Operating income from restaurants (net of income tax) Gain on sale of restaurants (net of income tax) Nonrecurring loss $ 56,000,000 40,700,000 800,000 4,956,000 3,360,000 All of these amounts are before income taxes unless indicated otherwise. The company's income tax rate is 40 percent. The nonrecurring loss resulted from damage to a warehouse that is not related to the discontinued restaurant operations. Eastern Aviation had 1,000,000 shares of capital stock outstanding throughout the year.

Eastern Aviation operated both an airline and several restaurants located near airports. During the year just ended, all restaurant operations were discontinued and the following operating results were reported. Continuing operations (airline): Net sales Costs and expenses Other data: Operating income from restaurants (net of income tax) Gain on sale of restaurants (net of income tax) Nonrecurring loss $ 56,000,000 40,700,000 800,000 4,956,000 3,360,000 All of these amounts are before income taxes unless indicated otherwise. The company's income tax rate is 40 percent. The nonrecurring loss resulted from damage to a warehouse that is not related to the discontinued restaurant operations. Eastern Aviation had 1,000,000 shares of capital stock outstanding throughout the year.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question

am.105.

Eastern Aviation operated both an airline and several restaurants located near airports. During the year just ended, all restaurant operations were discontinued and the following operating results were reported. Continuing operations (airline): Net sales Costs and expenses Other data: Operating income from restaurants (net of income tax) Gain on sale of restaurants (net of income tax) Non recurring loss All of these amounts are before income taxes unless indicated otherwise. The company's income tax rate is 40 percent. The nonrecurring loss resulted from damage to a warehouse that is not related to the discontinued restaurant operations. Eastern Aviation had 1,000,000 shares of capital stock outstanding throughout the year. Complete this question by entering your answers in the tabs below. Required: a. Prepare a condensed income statement, including proper presentation of the discontinued restaurant operations and the nonrecurring loss. Include all appropriate earnings per share figures. b. Assume that you expect the profitability of Eastern Aviation operations to decline by 5 percent next year. What is your estimate of the company's net earnings per share next year? Required A $ 56,000,000 40,700,000 Required B Net earnings 800,000 4,956,000 3,360,000 Assume that you expect the profitability of Eastern Aviation operations to decline by 5 percent next year. What is your estimate of the company's net earnings per share next year? (Round your intermediate calculations and final answer to 2 decimal places.) per share
Transcribed Image Text:Eastern Aviation operated both an airline and several restaurants located near airports. During the year just ended, all restaurant operations were discontinued and the following operating results were reported. Continuing operations (airline): Net sales Costs and expenses Other data: Operating income from restaurants (net of income tax) Gain on sale of restaurants (net of income tax) Non recurring loss All of these amounts are before income taxes unless indicated otherwise. The company's income tax rate is 40 percent. The nonrecurring loss resulted from damage to a warehouse that is not related to the discontinued restaurant operations. Eastern Aviation had 1,000,000 shares of capital stock outstanding throughout the year. Complete this question by entering your answers in the tabs below. Required: a. Prepare a condensed income statement, including proper presentation of the discontinued restaurant operations and the nonrecurring loss. Include all appropriate earnings per share figures. b. Assume that you expect the profitability of Eastern Aviation operations to decline by 5 percent next year. What is your estimate of the company's net earnings per share next year? Required A $ 56,000,000 40,700,000 Required B Net earnings 800,000 4,956,000 3,360,000 Assume that you expect the profitability of Eastern Aviation operations to decline by 5 percent next year. What is your estimate of the company's net earnings per share next year? (Round your intermediate calculations and final answer to 2 decimal places.) per share
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 4 steps with 3 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Tax loss carryovers
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS