Esquire Comic Book Company had income before tax of $1,000,000 in 2018 before considering the followingmaterial items:1. Esquire sold one of its operating divisions, which qualified as a separate component according to generallyaccepted accounting principles. The before-tax loss on disposal was $350,000. The division generated beforetax income from operations from the beginning of the year through disposal of $500,000. Neither the loss ondisposal nor the operating income is included in the $1,000,000 before-tax income the company generatedfrom its other divisions.2. The company incurred restructuring costs of $80,000 during the year.Required:Prepare a 2018 income statement for Esquire beginning with income from continuing operations. Assume anincome tax rate of 40%. Ignore EPS disclosures
Esquire Comic Book Company had income before tax of $1,000,000 in 2018 before considering the following
material items:
1. Esquire sold one of its operating divisions, which qualified as a separate component according to generally
accepted accounting principles. The before-tax loss on disposal was $350,000. The division generated beforetax income from operations from the beginning of the year through disposal of $500,000. Neither the loss on
disposal nor the operating income is included in the $1,000,000 before-tax income the company generated
from its other divisions.
2. The company incurred restructuring costs of $80,000 during the year.
Required:
Prepare a 2018 income statement for Esquire beginning with income from continuing operations. Assume an
income tax rate of 40%. Ignore EPS disclosures
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