Question

Tamarisk Corporation had income from continuing operations of $10,763,000 in 2020. During 2020, it disposed of its restaurant division at an after-tax loss of $201,600. Prior to disposal, the division operated at a loss of $324,000 (net of tax) in 2020. Tamarisk had 10,000,000 shares of common stock outstanding during 2020. Prepare a partial income statement for Tamarisk beginning with income from continuing operations.

Answer 1

Answer:

$1.02

Explanation:

Preparation of the partial income statement for Tamarisk beginning with income from continuing operations.

Income from continuing operations $10,763,000

Less Discontinued operations:

Loss from operation of discontinued restaurant division (net of tax) ($324,000)

Loss from disposal of restaurant division(net of tax) (201,600)

Net income$10,237,400

Earnings per share:

Income from continuing operations$1.07

($10,763,000÷$10,000,000)

Discontinued operations, net of tax(0.05)

(324,000+201,600= 525,600

Net income $1.02

Calculation for Discontinued operations,

(324,000+201,600)= 525,600

525,600÷$10,237,400

=0.05

Therefore the Net income is $1.02