Create an income statement with income

Reference no: EM131908670

Problem

Maher Inc. reported income from continuing operations before taxes during 2017 of $790,000. Additional Transactions occurring in 2017 but not considered in the $790,000 are as follows:

1. The corporation experienced an uninsured flood loss in the amount of $90,000 during the year 2. At the beginning of 2015, the corporation purchased a machine for $54,000 (salvage value of $9,000) that had a useful life of 6 years. The bookkeeper used straight line depreciation for 2015, 2016, and 2017, but failed to deduct the salvage value in computing the depreciation base. 3. Sale of securities held as a part of its portfolio resulted in a loss of $57,000 (pretax). 4. When it's president died, the corporation realized $150,000 from an insurance policy. The cash surrender value of this policy had been carried on the books as an investment in the amount of $46,000 (the gain is nontaxable). 5. The coporation disposed of its recreational division at a loss of $115,000 before taxes. Assume that this transaction meets the criteria for discontinued operations. 6. The corporation decided to change its method of inventory pricing from average-cost to the FIFO method. The effect fo this change on prior years is to increase 2015 income by $60,000 and decrease 2016 income by $20,000 before taxes. The FIFO method has been used for 2017. The tax rate on these items is 40%.

- Prepare an income statement for 2017 starting with income form continuing operations before taxes.

- Compute earnings per share as it should be shown on the face of the income statement.

- Common shares outstanding for the year are $120,000 shares.

Reference no: EM131908670

Questions Cloud

Act of heroism or selflessness : 1) Think of a time when you, or someone you know, engaged in what seemed to be an act of heroism or selflessness.

Engaging students in the learning process : Which strategy from the seminal article by Kagan do you believe is the most critical for engaging students in the learning process? Defend your choice.

International writing-editing company : You are the HR Manager of an International Writing & Editing Company; a company that promotes itself through online marketing.

Pressure ulcer in elderly population : What would be a great PICO question in relate to pressure ulcer in elderly population?

Create an income statement with income : Maher Inc. reported income from continuing operations. Create an income statement for 2017 starting with income form continuing operations before taxes.

Discuss three factors that affect your daily food choices : Discuss three factors that affect your daily food choices. These are also known as determinants of food choices.

Post a feedback e-mail : Post a feedback e-mail. Be sure to write it as if you were the person described in the scenario below.

Explain the phenomenon of crypto-judaism in iberia : Explain the phenomenon of crypto-Judaism in Iberia. What did it mean? Why did many Jews choose to do it?

Compute the equivalent units for materials costs : Magic Company adds materials at beginning of process. Compute equivalent units for materials costs and for conversion costs using the weighted-average method.

User Account

All Pages