Question

Presented below are selected ledger accounts of Tucker Corporation as of December 31, 2014.

Answer 1

Answer:

Income from continuing operations:

= Net sales - COGS - Selling expense - Admin expenses

= 540,000 - 210,000 - 80,000 - 100,000

= $150,000

Discontinued operations net of tax:

= 40,000 * ( 1 - 30%)

= $28,000

                         Net income and Partial income statement

Income from continuing operations before tax                   $150,000

Income tax expense (150,000 * 30%)                                   ($45,000)

Income from continuing operations                                      $105,000

Discontinued operations net of taxes loss                           ($28,000)

Net income                                                                             $77,000

Earnings per share  

Income from continuing operations(105,000/10,000)        $10.50

Discontinued operations(28,000 / 10,000)                         $2.80

Net income (77,000 / 10,000)                                               $7.70

Earnings per share calculated assuming 10,000 shares.