Question

please help fill in what i got wrong. also please show all work , im really trying to understand this

thank you!!!

Your answer is partially correct. Tamarisk Inc. reported income from continuing operations before taxes during 2020 of $805,200. Additional transactions occurring in 2020 but not considered in the $805,200 are as follows. 1. 2. 3. 4. The corporation experienced an uninsured flood loss in the amount of $90,700 during the year. At the beginning of 2018, the corporation purchased a machine for $63,000 (salvage value of $10,500) that had a useful life of 6 years. The bookkeeper used straight-line depreciation for 2018, 2019, and 2020, but failed to deduct the salvage value in computing the depreciation base. Sale of securities held as a part of its portfolio resulted in a loss of $59,300 (pretax). When its president died, the corporation realized $135,700 from an insurance policy. The cash surrender value of this policy had been carried on the books as an investment in the amount of $50,460 (the gain is nontaxable). The corporation disposed of its recreational division at a loss of $112.010 before taxes. Assume that this transaction meets the criteria for discontinued operations. The corporation decided to change its method of inventory pricing from average-cost to the FIFO method. The effect of this change on prior years is to increase 2018 income by $55,790 and decrease 2019 income by $20,180 before taxes. The FIFO method has been used for 2020. The tax rate on these items is 30%. 5. 6. Prepare an income statement for the year 2020 starting with income from 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 110,250 shares. (Assume a tax rate of 30% on all items, unless indicated otherwise.) (Round earnings per share to 2 decimal places, eg. 1.48 and all other answers to decimal places, e.g. 5,275.)

Answer 1

$742.190 -$197,085 $545,105 $112.010 -$33,603 -$78,407 $466,698 Tamarisk Inc. Income Statement (Partial) For the Year Ended December 31, 2020 Income from continuing operations before income taxes Income tax expense Income from continuing operations Discontinued operations Loss from disposal of recreational division Less: Applicable income tax reduction Net Income (loss) Earning per share Income from continuing operations ($545.105 / 110.250 shares) Discontinued operations, net of tax (-$78.407 / 110.250 shares) Net Income / (loss) Workings: Income from continued operation before income taxes: As previously stated loss on sale of securities Gain on Proceeds of Lie Insurance Policy ($135,700 - $50.460) Flood loss Error in computation of depriciation As computed (563.000 / 6 years) Corrected [(63,000 - $10,500) / 6 years] As restated $4.94 -S0.71 $4.23 $805,200 -$59,300 $85,240 -$90,700 $10.500 $8.750 $1,750 $742,190 Income tax expense: Income from continuing operations before taxes Non taxable income (gain on life insurance) Taxable income Tax rate Income tax expense $742.190 -$85,240 $656.950 30% $197,085