E 4-6 Discontinued operations L04-4, L04-5 Chance Company had two operating divisions, one manufacturing farm equipment and the other office supplies. Both divisions are considered separate components as defined by generally accepted accounting principles. The farm equipment component had been unprofitable, and on September 1, 2021, the company adopted a plan to sell the assets of the division. The actual sale was completed on December 15, 2021, at a price of $600,000. The book value of the division's assets was $1,000,000, resulting in a before-tax loss of $400,000 on the sale. The division incurred a before-tax operating loss from operations of $120,000 from the beginning of the year through December 15. The income tax rate is 25%. Chance's after-tax income from its continuing operations is 5550,000 Required: Prepare an income statement for 2021 beginning with income from continuing operations. Include appropriate EPS disclosures assuming that 100,000 shares of common stock were outstanding throughout the year. 212 SECTION 1 The Role of Accounting as an Information System E 4-7 Esquire Comic Book Company had income before tax of $1.000.000 in 2021 before considering the following Income statement material items: presentation 1. Esquire sold one of its operating divisions, which qualified as a separate component according to gener- discontinued ally accepted accounting principles. The before-tax loss on disposal was $340,000. The division generated operations; before-tax income from operations from the beginning of the year through disposal of $500,000. restructuring 2. The company incurred restructuring costs of $80,000 during the year costs L04-1, L04-3. Required: L04-4 Prepare a 2021 income statement for Esquire beginning with income from continuing operations. Assume an income tax rate of 25%. Ignore EPS disclosures E 4-10 Earnings per share L04-5 The Esposito Import Company had 1 million shares of common stock outstanding during 2021. Its income state- ment reported the following items income from continuing operations, S5 million: loss from discontinued opera tions, $1.6 million. All of these amounts are net of tax. Required: Prepare the 2021 EPS presentation for the Esposito Import Company. The Massoud Consulting Group reported net income of 51.354,600 for its fiscal year ended December 31, 2021. In addition, during the year the company experienced a positive foreign currency translation adjustment of S240,000 and an unrealized loss on debt securities of $80,000. The company's effective tax rate on all items affecting com- prehensive income is 25. Each component of other comprehensive income is displayed net of tax Required: Prepare a separate statement of comprehensive income for 2021 E 4-11 Comprehensive Income L04-6
