Information concerning operations of Camping Gear Corporation during 2010 is as follows: a. Administrative expenses, $90,000 b.

Question:

Information concerning operations of Camping Gear Corporation during 2010 is as follows:

a. Administrative expenses, $90,000

b. Cost of goods sold, $420,000

c. Extraordinary loss from an earthquake (net of taxes, $36,000), $60,000

d. Sales (net), $900,000

e. Selling expenses, $80,000

f. Income taxes expense applicable to continuing operations, $105,000

Required

1. Prepare the corporation’s income statement for the year ended December 31, 2010, including earnings per share information. Assume a weighted average of 50,000 common shares outstanding during the year.

2. Which item in Camping Gear Corporation’s income statement affects the company’s quality of earnings? Why does it have an effect on quality of earnings?

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...