Question

Origami Imports engages in the retail sale of household products and clothing. During 2019, the company disposed of the clothing segment. Origami Imports had 150,000 shares of stock outstanding all year. The results of operations for 2019 follow. Household Products $15,000,000 11,400,000 1,400,000 Clothing $3,900,000 3,500,000 300,000 680,000 Net sales Cost of goods sold Operating expenses Loss on disposal of clothing business (before income tax effect) Interest expense Extraordinary loss from expropriation of operations in foreign country (before income tax effect) 40,000 80,000 Income taxes of 40% apply to all items. Required: Prepare an income statement for items after continuing operations for the year ended December 31, 2019, in proper format.

Answer 1

Origami Imports Statement of Income For the year ended December 31, 2019 2019 15,000,000 11,400,000 3,600,000 Particulars Revenue Cost of Sales Gross Profit Operating Expenses Operating Expenses Interest Expenses Earning before Taxes from Continuing Operation Income Taxes Income from Continuing Operations(a) 1,400,000 40,000 1,440,000 2,160,000 864,000 1,296,000 60,000 Discontinued Operation Income during the year* Less: Taxes Loss From Disposal Less: Taxes Income before extraordinary Loss(b) Extraordinary Items Extraordinary loss from expropriation of operation in foreign country 100,000 (40,000) (680,000) 272,000 (408,000) (348,000) 948,000 (80,000) (48,000) 900,000 Less: Taxes 32,000 Net Income © Basic Earnings per share Income from Continuitng Operation (a/No.of Shares) From Discontinued Operaton (Discontinued Op/No of shares) Before Extraordinary Loss (b/No.of shares) Extraordinary Loss (Extrordinary Shares/No of shares) Basic Earnings per share (c/No of shares) 8.64 (2.32) 6.32 (0.32) 6.00 Working No. of Shares 150,000 Income from Clothing business* Revenue Cost of Sales Operating Expenses Income 3,900,000 (3,500,000) (300,000) 100,000