Exercise 12.4

EXERCISE 12.4 Discontinued Operations LO12-2, LOM LO2-3 During the current year, Sports +, Inc., operated two business segments: a chain of surf and dive shops and a small chain of tennis shops. The tennis shops were not profitable and were sold near year-end to another corporation. Sports + operations for the current year are summarized as follows. The first two captions, "Net sales" and "Costs and expenses," relate only to the company's continuing operations. NetsalesCostsandexpenses(includingapplicableincometax)Operatinglossfromtennisshops(netofincometaxbenefit)Lossonsaleoftennisshops(netofincometaxbenefit)$12,500,0008,600,000192,000348,000 The company had 182,000 shares of a single class of capital stock outstanding throughout the year. a. Prepare a condensed income statement for the year. At the bottom of the statement, show any appropriate earnings per share figures. (A condensed income statement is illustrated in Exhibit 12-2.) b. Which earnings per share figure in part a do you consider most useful in predicting future operating results for Sports +, Inc.? Why? Exercise 12.4