2. The information pertaining to improper accounting adjustments in Q2, 2017 is provided in the case. a. Compute the pre-tax and after-tax effect on the non-GAAP income had PPG not made those adjustments. For the sake of simplicity, assume an income tax rate of 24% and the number of shares of 258 million for per share calculations. Provide your answer in the format provided below.

Accounting Adjustments in Q2, 2017

Although the improper accounting adjustments for Q2, 2017 did not affect the annual income of FY 2017, the reported income of Q2, 2017, and other quarters in FY 2017 were incorrect. PPG filed Form 10-K/A (Amended annual report) for the fiscal year ending December 31, 2017) with the SEC on June 28, 2018. The 10-K/A reported the following accounting adjustments that PPG made in Q2, 2017:

(i) (ii) (iii)

(iv) (v)

VI.

Improper reclassifications of the gains of $2.5 million from discontinued operations to income from continuing operations.

Compensation payments of $3.5 million to an employee who left PPG in Q2, 2017 should have been expensed in Q2, 2017, but were recorded in Q3, 2017, and Q4, 2017.

PPG was self-insured and retained a reserve for healthcare claims. It recorded an accrual every month and adjusted, if necessary, the healthcare reserve every quarter. At the end of Q2, 2017, Mark Kelly directed a subordinate to delay $3.5 million of expenses accrual until Q3, 2017.

The expenses for paid vacations of $0.885 million that should have been recorded in Q2, 2017 were recorded in Q4, 2017.

Expenses of $1.4 million associated with certain customer rebates should have been recorded in Q2, 2017 but were recorded later in FY 2017.