Question

Wildhorse Corporation had income from continuing operations of $10,742,900 in 2020. During 2020, it disposed of its restaurant division at an after-tax loss of $207,200. Prior to disposal, the division operated at a loss of $323,900 (net of tax) in 2020 (assume that the disposal of the restaurant division meets the criteria for recognition as a discontinued operation). Wildhorse had 10,000,000 shares of common stock outstanding during 2020. Prepare a partial income statement for Wildhorse beginning with income from continuing operations

Answer 1

Answer:

See explanation Section

Explanation:

Partial net income consists of any disposals and loss will be deducted from income from continuing operations. The following income statement suggests Wildhorse Corporation's partial income statement and earnings per share.

                     Wildhorse Corporation

                   partial income statement

Income from continuing operations                                 $10,742,900

Less: Discontinued Operation

Disposal of restaurant division (After-tax) with a loss        ($207,200)

Loss from continuing of restaurant division (net of tax)   ($323,900)

                                                                                             ($531,100)  

Net Income after deducting discontinued operations    $10,211,800

Earnings per share

Net Income ÷ Number of common stock outstanding

$10,211,800 ÷ 10,000,000                                                   $1.02