#16

P1. (10 Points) Presented below are selected amounts from the records of Victoria Corporation as of December 31, Year 2.

Cash $ 50,000

Administrative expenses 100,000

Selling expenses 80,000

Net Sales 540,000

Cost of goods sold 260,000

Cash dividends declared (Year 2) 20,000

Cash dividends paid (Year 2) 15,000

Discontinued operations (loss before income taxes) 40,000

Depreciation expense, not reported in Year 1 30,000

Retained earnings, December 31, Year 1 90,000

Effective tax rate 30%

Instructions

(a) Compute net income for Year 2.

(b) Prepare a partial income statement beginning with income from continuing operations before income tax, and including appropriate earnings per share information. Assume 20,000 shares of common stock were outstanding during Year 2.