KEW Corp. has 500,000 shares of common stock outstanding. In 2008, KEW reports income from continuing operations before taxes of \($4,350,000.\) Additional transactions from 2008— and not considered in the \($4,350,000—are\) as follows:
. The company reviewed its notes receivable and discovered that a note carried at \($16,000\) was 18 months past due. The note was not likely to be collected.
. KEW sold machinery for \($85,000\) that originally cost \($300,000.\) Accumulated depreciation at the time of the sale amounted to \($225,000.\) KEW sells unneeded machinery occasionally when retooling one of its production processes.
. KEW sold a division during 2008 resulting in a pre-tax loss of \($890,000.\) The operating loss incurred by the discontinued division prior to its sale was \($650,000;\) the loss from its disposal was \($240,000.\) This transaction meets the SFAS No. 144 criteria for discontinued operations.
. KEW lost \($395,000\) (pre-tax) when a plant it operated in a third-world country was expropriated following a revolution. The company had no other foreign operations.
Required:
Based on this information, prepare an income statement for the year ended December 31, 2008, starting with income from continuing operations before income taxes; include proper earnings per share disclosures. KEW’s total effective tax rate on all items was 35%.