Question

Esquire Comic Book Company had income before tax of $1,700,000 in 2016 before considering the following material items:

Answer 1

Answer:

                    Esquire Comic Book Company

                               Income Statement

                For the Year Ended December 31, 2016

Income from continuing operations                                  $1,700,000

Restructuring costs                                                               ($75,000)

Income form continuing operations before taxes            $1,625,000

Income taxes                                                                       ($650,000)

Net income from continuing operations                             $975,000

Discontinued operations:

Income from discontinued operations                                $640,000

Loss on disposal of division                                               ($420,000)

Income from discontinued operations before taxes         $220,000

Income taxes                                                                         ($88,000)

Net income from discontinued operations                         $132,000

Total net income                                                                $1,107,000