Reference no: EM133185927

Question - On August 1, 20x1, Desert, Inc. adopted a plan to discontinue its children's clothing division, which qualifies as a component of the business according to GAAP. The disposal of the division was expected to be concluded by March 30, 20x2. On December 31, 20x1, Desert's fiscal year-end, the following information relative to the discontinued operation was accumulated:

Operating Income (pre-tax) of the Component for Jan 1 - Dec 31, 20x1 $ 658,000

Net Book Value of the Component at Dec 31, 20x1 3,575,000

Fair Value of the Component (Estimated Selling Price) 3,600,000

Estimated Disposal Costs 120,000

Income Tax Rate 30%

1. In its Income Statement for the year ended December 31, 20x1, Desert would report a total Gain/Loss on Discontinued Operations (net of tax) of: $___________________.

2. Determine EPS for Income from Continuing Operations.

3. Determine EPS - Discontinued Operations.

4. Determine EPS for Net Income.