Kingbird Inc. reported income from continuing operations before taxes during 2017 of $2,250,000. Additional transactions Occurring in 2017 but not considered in the $2,250,000 are as follows. A gain of $125,000 (pretax) as a result of selling securities from its investment portfolio. A$27,000 loss before taxes as a result of operating the discontinued clothing division during 2017. A loss of $78,000 before taxes as a result of disposing of its clothing division. Assume that this transaction meets the criteria for discontinued operations. An uninsured $122,000 loss due to a fire. At the beginning of 2015, the corporation purchased a machine for $260,000 (salvage value of $20,000) 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. 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 $64,000 and decrease 2016 income by $10,000 before taxes. The FIFO method has been used for 2017. 1. 2. 3. 4. 5. 6. Prepare an incon statement 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, eg. 1.48 and all other answers to 0 decimal places, eg. 5,275.)
Kingbird Inc. reported income from continuing operations before taxes during 2017 of $2,250,000. Additional transactions Occurring in 2017 but not considered in the $2,250,000 are as follows. A gain of $125,000 (pretax) as a result of selling securities from its investment portfolio. A$27,000 loss before taxes as a result of operating the discontinued clothing division during 2017. A loss of $78,000 before taxes as a result of disposing of its clothing division. Assume that this transaction meets the criteria for discontinued operations. An uninsured $122,000 loss due to a fire. At the beginning of 2015, the corporation purchased a machine for $260,000 (salvage value of $20,000) 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. 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 $64,000 and decrease 2016 income by $10,000 before taxes. The FIFO method has been used for 2017. 1. 2. 3. 4. 5. 6. Prepare an incon statement 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, eg. 1.48 and all other answers to 0 decimal places, eg. 5,275.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:Kingbird Inc. reported income from continuing operations before taxes during 2017 of $2,250,000. Additional transactions
Occurring in 2017 but not considered in the $2,250,000 are as follows.
A gain of $125,000 (pretax) as a result of selling securities from its investment portfolio.
A$27,000 loss before taxes as a result of operating the discontinued clothing division during 2017.
A loss of $78,000 before taxes as a result of disposing of its clothing division. Assume that this transaction meets the
criteria for discontinued operations.
An uninsured $122,000 loss due to a fire.
At the beginning of 2015, the corporation purchased a machine for $260,000 (salvage value of $20,000) 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.
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 $64,000 and decrease 2016 income by $10,000 before taxes. The FIFO
method has been used for 2017.
1.
2.
3.
4.
5.
6.
Prepare an incon
statement
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, eg. 1.48 and all other answers to 0 decimal
places, eg. 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
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education