Question
Esquire Comic Book Company had income before tax of $1,500,000 in 2016 before considering the following material items: 1. Esquire sold one of its operating
| Esquire Comic Book Company had income before tax of $1,500,000 in 2016 before considering the following material items: |
| 1. | Esquire sold one of its operating divisions, which qualified as a separate component according to generally accepted accounting principles. The before-tax loss on disposal was $400,000. The division generated before-tax income from operations from the beginning of the year through disposal of $600,000. Neither the loss on disposal nor the operating income is included in the $1,500,000 before-tax income the company generated from its other divisions. |
| 2. | The company incurred restructuring costs of $55,000 during the year. |
| Required: | |
| Prepare a 2016 income statement for Esquire beginning with income from continuing operations. Assume an income tax rate of 40%. Ignore EPS disclosures. (Amounts to be deducted should be indicated with a minus sign.) |
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Accounting for Non-Accounting Students
Authors: John R. Dyson
8th Edition
273722972, 978-0273722977
