During 2012, Dash Corporation engaged in two transactions to improve the business—selling off a division and sale of investments. The company has always issued a simple single-step income statement, and the accountant has accordingly prepared the December 31 year-end income statements for 2011 and 2012, as shown below.

Henry Dash, the president of Dash Corporation, is pleased that both net income and earnings per share increased by almost 33 percent from 2011 to 2012, and he intends to announce to the company’s stockholders that the plan to improve the business has been successful.

1. Recast the 2012 and 2011 income statements in proper multistep form, including allocating income taxes to appropriate items (assume a 30 percent income tax rate) and showing earnings per share figures (400,000 shares outstanding).

2. What is your assessment of Dash Corporation’s plan and business operations in 2012?

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Dash Corporation Income Statements For the Years Ended December 31, 2012 and 2011 2012 Net sales Cost of goods sold Operating expenses Income taxes expense Income from operations ofa $2,000,000 (1,100,000) (450,000) (358,200) 2011 $2,400,000 (1,200,000) (300,000) (270,000) discontinued segment Gain on disposal of discontinued segment Gain on retirement of bonds Net income Earmings per share 320,000 280,000 144,000 $835800 S 630,000