#8 - Discontinued Operations Abeyta Company had two operating divisions and both are considered separate components. The farm equipment component had been unprofitable, and on September 1, 20X5, the company adopted a plan to sell the division. The division had not been sold as of December 31, 20X5. The estimated fair value of the division at year end was $600,000. The book value of the division's assets at year end was $1,000,000. The division incurred a before-tax operating loss from operations during 20x5 of $120,000. Change's before-tax income from continuing operations is $550,000. The income tax rate is 25%. Required: Prepare an income statement for 20x5 beginning with income from continuing operations before tax. Include EPS disclosures assuming 100,000 shares of common stock were outstanding throughout the year. #9 - Adjusting Entries In reviewing the income statement for the month of June, you notice $900 reported as insurance expense. The balance sheet reports 6/30/X7 balance in prepaid insurance of $7,200. Assuming the company purchases and pays for an annual insurance policy in advance, how many months of insurance remain and when was it originally purchased