Reference no: EM132067194

Question - Wade Corp. has 149,100 shares of common stock outstanding. In 2014, the company reports income from continuing operations before income tax of $1,214,000. Additional transactions not considered in the $1,214,000 are as follows:

1. In 2014, Wade Corp. sold equipment for $36,500. The machine had originally cost $81,700 and had accumulated depreciation of $34,800. The gain or loss is considered ordinary.

2. The company discontinued operations of one of its subsidiaries during the current year at a loss of $190,000 before taxes. Assume that the transaction meets the criteria for discontinued operations. The loss from operations of the discontinued subsidiary was $93,900 before taxes; the loss form disposal for the subsidiary was $96,100 before taxes.

3. An internal audit discovered that amortization of intangible assets was understated by $35,300 (net of tax) in a prior period. The amount was charged against retained earnings.

4. The company had a gain of $128,200 on the condemnation of much of its property. The gain is taxed at a total effective rate of 40%. Assume the transaction meets the reqirements of an extraordinary item.

Analyze the above info and prepare an income statement for the year 2014, starting with income from continuing operations before income.

Compute earnings per share as it should be shown on the face of the income statement. (Assume a total effective tax rate of 38% on all items, unless otherwise indicated.) Round EPS to 2 decimal places. Show your work.