Question

Teal Corporation had income from continuing operations of $10,685,300 in 2017. During 2017, it disposed of its restaurant division at an after-tax loss of $207,200. Prior to disposal, the division operated at a loss of $315,300 (net of tax) in 2017 (assume that the disposal of the restaurant division meets the criteria for recognition as a discontinued operation). Teal had 10,000,000 shares of common stock outstanding during 2017. Prepare a partial income statement for Teal beginning with income from continuing operations. (Round earnings per share to 2 decimal places, e.g. 1.48.) TEAL CORPORATION Income Statement (Partial)

Answer 1

SOLUTION

Income statement (Partial)

Particulars	Amount ($)	Amount ($)
Income from continuing operations		10,685,300
Discontinued operations-
Loss from operation of discontinued restaurant division, net of tax	315,300
Loss from disposal of restaurant division,net of tax	207,200
		(522,500)
Net income		10,162,800
Earnings per share-
Income from continuing operations ($1,0685,300/10,000,000)		1.07
Discontinued operations, net of tax ($522,500/10,000,000)		(0.05)
Net income ($10,162,800/10,000,000)		1.02