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Windsor Inc. reported income from continuing operations before taxes during 2020 of $816,500. Additional transactions occurring in 2020 but not considered in the $816,500 are as follows. 1. 2. 3. 4. 5. 6. The corporation experienced an uninsured flood loss in the amount of $90,600 during the year. At the beginning of 2018, the corporation purchased a machine for $61,200 (salvage value of $10,200) that had a useful life of 6 years. The bookkeeper used straight-line depreciation for 2018, 2019, and 2020, but failed to deduct the salvage value in computing the depreciation base. Sale of securities held as a part of its portfolio resulted in a loss of $59,800 (pretax). When its president died, the corporation realized $136,400 from an insurance policy. The cash surrender value of this policy had been carried on the books as an investment in the amount of $48,930 (the gain is nontaxable). The corporation disposed of its recreational division at a loss of $113,710 before taxes. Assume that this transaction meets the criteria for discontinued operations. 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 2018 income by $63,980 and decrease 2019 income by $21,750 before taxes. The FIFO method has been used for 2020. The tax rate on these items is 30%. Prepare an income statement for the year 2020 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 127,820 shares. (Assume a tax rate of 30% on all items, unless indicated otherwise.) (Round earnings per share to 2 decimal places, e.g. 1.48 and all other ore to O decimal plass og 52751

Windsor Inc. reported income from continuing operations before taxes during 2020 of $816,500. Additional transactions occurring in 2020 but not considered in the $816,500 are as follows. 1. 2. 3. 4. 5. 6. The corporation experienced an uninsured flood loss in the amount of $90,600 during the year. At the beginning of 2018, the corporation purchased a machine for $61,200 (salvage value of $10,200) that had a useful life of 6 years. The bookkeeper used straight-line depreciation for 2018, 2019, and 2020, but failed to deduct the salvage value in computing the depreciation base. Sale of securities held as a part of its portfolio resulted in a loss of $59,800 (pretax). When its president died, the corporation realized $136,400 from an insurance policy. The cash surrender value of this policy had been carried on the books as an investment in the amount of $48,930 (the gain is nontaxable). The corporation disposed of its recreational division at a loss of $113,710 before taxes. Assume that this transaction meets the criteria for discontinued operations. 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 2018 income by $63,980 and decrease 2019 income by $21,750 before taxes. The FIFO method has been used for 2020. The tax rate on these items is 30%. Prepare an income statement for the year 2020 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 127,820 shares. (Assume a tax rate of 30% on all items, unless indicated otherwise.) (Round earnings per share to 2 decimal places, e.g. 1.48 and all other ore to O decimal plass og 52751

Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter22: Accounting For Changes And Errors.
Section: Chapter Questions
Problem 13P: Gray Companys financial statements showed income before income taxes of 4,030,000 for the year ended...
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Income From Continuing Operations Before Income Tax Income Tax Income From Continuing Operations Discontinued Operations Loss From Disposal of Recreational Division Less Applicable Income Tax Reduction Net Income /(Loss) Earnings Per Share Income From Continuing Operations Loss From Disposal of Recreational Division WINDSOR INC. Income Statement (Partial) For the Year Ended December 31, 2020 Net Income /(Loss) LA -113710 i 79597 $ ta $ tA LA tA $ 756700 -227010 529690 -34113 495577
Transcribed Image Text:Income From Continuing Operations Before Income Tax Income Tax Income From Continuing Operations Discontinued Operations Loss From Disposal of Recreational Division Less Applicable Income Tax Reduction Net Income /(Loss) Earnings Per Share Income From Continuing Operations Loss From Disposal of Recreational Division WINDSOR INC. Income Statement (Partial) For the Year Ended December 31, 2020 Net Income /(Loss) LA -113710 i 79597 $ ta $ tA LA tA $ 756700 -227010 529690 -34113 495577
Windsor Inc. reported income from continuing operations before taxes during 2020 of $816,500. Additional transactions occurring in 2020 but not considered in the $816,500 are as follows. 1. 2. 3. 4. 5. 6. The corporation experienced an uninsured flood loss in the amount of $90,600 during the year. At the beginning of 2018, the corporation purchased a machine for $61,200 (salvage value of $10,200) that had a useful life of 6 years. The bookkeeper used straight-line depreciation for 2018, 2019, and 2020, but failed to deduct the salvage value in computing the depreciation base. Sale of securities held as a part of its portfolio resulted in a loss of $59,800 (pretax). When its president died, the corporation realized $136,400 from an insurance policy. The cash surrender value of this policy had been carried on the books as an investment in the amount of $48,930 (the gain is nontaxable). The corporation disposed of its recreational division at a loss of $113,710 before taxes. Assume that this transaction meets the criteria for discontinued operations. 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 2018 income by $63,980 and decrease 2019 income by $21,750 before taxes. The FIFO method has been used for 2020. The tax rate on these items is 30%. Prepare an income statement for the year 2020 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 127,820 shares. (Assume a tax rate of 30% on all items, unless indicated otherwise.) (Round earnings per share to 2 decimal places, e.g. 1.48 and all other answers to decimal placer og 5375)
Transcribed Image Text:Windsor Inc. reported income from continuing operations before taxes during 2020 of $816,500. Additional transactions occurring in 2020 but not considered in the $816,500 are as follows. 1. 2. 3. 4. 5. 6. The corporation experienced an uninsured flood loss in the amount of $90,600 during the year. At the beginning of 2018, the corporation purchased a machine for $61,200 (salvage value of $10,200) that had a useful life of 6 years. The bookkeeper used straight-line depreciation for 2018, 2019, and 2020, but failed to deduct the salvage value in computing the depreciation base. Sale of securities held as a part of its portfolio resulted in a loss of $59,800 (pretax). When its president died, the corporation realized $136,400 from an insurance policy. The cash surrender value of this policy had been carried on the books as an investment in the amount of $48,930 (the gain is nontaxable). The corporation disposed of its recreational division at a loss of $113,710 before taxes. Assume that this transaction meets the criteria for discontinued operations. 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 2018 income by $63,980 and decrease 2019 income by $21,750 before taxes. The FIFO method has been used for 2020. The tax rate on these items is 30%. Prepare an income statement for the year 2020 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 127,820 shares. (Assume a tax rate of 30% on all items, unless indicated otherwise.) (Round earnings per share to 2 decimal places, e.g. 1.48 and all other answers to decimal placer og 5375)
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