Prepare an income statement of private holding inc

Reference no: EM132864173

Jim holds 10% of the capital of Private Holding Inc., a company dedicated to Real Estate investments.

In order to make an investment in a new project, the company issued on 1st of January 2020 1,000 11% cumulative preferred stocks of $1,000 face value
The company also provided some financial services to clients but decided to sell this segment to Happy Financing Ltd on February 21st 2020.
During the year 2020, Private Holding Inc. obtained a net income from continuing operations of $1,275,000 once deducted the 30% Corporate Income tax
The losses before taxes generated by operating the segment until February 21st 2020 were $75,000. The segment was sold for $100,000, implying a gain before taxes of $32,000 for Private Holding Inc.
In June 2020, a tornado destroyed several apartments held by Private Holding Inc. in the Caribbean, causing a loss before taxes of $1,090,000.

During the year 2020, the company had 150,000 shares of common stock outstanding

Question 1: Prepare an income statement of Private Holding Inc. for the year 2020, including ne income from continuing operations, discontinued operations, disposal of the segment and extraordinary events. Explain your calculations.

Question 2: Calculate the earnings per share of common stocks. Explain your calculations.

Question 3: In January 2020, the accountant of the company considered that the useful life of the IT equipment should be lowered from 8 to 6 years. The equipment was purchased on January 1, 2019 for $32,000, with no salvage value. What is the effect of this change in estimates on the net income of the company? Explain your answer and calculations.

Reference no: EM132864173

Questions Cloud

Discuss four good options for sean frisky : Discuss four good options for Sean Frisky to start a successful business. The options may be around product, distribution, business model, or target customer.

Summarize the alpha and ais integration : Describe how the ALPHA method can be applied to small agricultural organizations. Explain how the AIS application helped the Malaysian agricultural industry.

Describe how a country can measure income inequality : Evaluate the effect of income inequality on the U.S. economy, such as unemployment, economic growth, and other economic factors.

Organizational justice and equity theory of motivation : Briefly explain the Organizational justice and Equity theory of motivation?.

Prepare an income statement of private holding inc : Prepare an income statement of Private Holding Inc. for the year 2020, including ne income from continuing operations, discontinued operations

What is corporate governance : What is corporate governance and who has a role? What is the communities role?

Which division or divisions will probably accept opportunity : If performance is being measured by residual income, which division or divisions will probably accept the opportunity? Reject? Why?

Influencing organizational ethics : What role do external social pressures have in influencing organizational ethics? How might these issues be relevant to organizational and personal decisions?

Merchandise purchases budget for november and december : The November beginning balance in the accounts receivable account is $74,000. Merchandise Purchases Budget for November and December

User Account

All Pages