Question

Pronghorn Corporation had income from continuing operations of $12,100,000 in 2017. During 2017, it disposed of its restaurant division at an after-tax loss of $208,000. Prior to disposal, the division operated at a loss of $412,000 (net of tax) in 2017 (assume that the disposal of the restaurant division meets the criteria for recognition as a discontinued operation). Pronghorn had 10,000,000 shares of common stock outstanding during 2017. Prepare a partial income statement for Pronghorn beginning with income from continuing operations. (Round earnings per share to 2 decimal places, e.g. 1.48.)

Answer 1

Answer:

Net Income =     $11,480,000

Earnings Per Share = $1.148

Explanation:

The question is to determine Pronghorn's Corporation's Partial Income Statement

Pronghorn's Income Statement for the year 2017

                 Description                                      Amount ($)         Amount ($)

Continuing Operations Income                                                  12,100,000

Discontinued Operations:

Discontinued Restaurant division's Loss         412,000

Loss on Restaurant's Disposal                          208,000    

The total loss on discontinued operations                                 (620,000)

Net Income                                                                                   $11,480,000

Part 2 is to determine the Earnings Per share as follows

What is the income per share = $12,100,000/ 10,000,000 shares

= $1.21

what is the loss per share on discontinued restaurant division

= $620,000/10,000,000 = $0.062

Earnings Per Share = $1.21- $0.062 = $1.148