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On August 1, 20x1, Sparky Mercantile adopted a plan to discontinue its children's clothing division, which qualifies as a component of the business according to GAAP. The disposal of the division was expected to be concluded by June 30, 20x2. On December 31, 20x1, Sparky's fiscal year-end, the following information relative to the discontinued operation was accumulated: $ 549,000 3,225,000 Operating Income (pre-tax) Jan 1, 20x1 - Dec 31, 20x1 Net Book Value of the Component at Dec 31, 20x1 Fair Value of the Component Estimated Disposal Costs Income Tax Rate 3,100,000 120,000 30% Because the sale was not complete by December 31, 2018, Sparky had to test the component for impairment. Determine the Impairment Loss (net of tax), that Sparky would report in their 20x1 footnotes (if any): $ *If an impairment loss is indicated, just record your answer as a positive number. Do not use commas or dollar signs. Using the information presented in #1 above, determine the following: In its Income Statement for the year ended December 31, 20x1, Sparky would report a total Gain/Loss on Discontinued Operations (net of tax) of: $ *Do not use dollar signs or commas when recording your answer. If your answer is a Loss, record your answer using () parenthesis. Sparky finalized the sale of the component on June 30, 20x2 for net cash proceeds of $2,700,000. Actual operating income of the discontinued component from Jan 1 - Jun 30, 20x2, was $220,000. (This $220,000 is NOT included in the $1,900,000 Income Before Taxes listed below.) Use this information and the Additional Data presented below to prepare a partial Income Statement for the year ended December 31, 20x2 beginning with Income from Continuing Operations. Include Earnings Per Share disclosures. Additional Data: Income Before Taxes (x2) $1,900,000 Income Tax Rate ('x2) 30% 5% Preferred Stock ($100 Par, 10,000 shares issued) Common Stock ($1 par, 600,000 shares issued, 500,000 outstanding) Partial Income Statement Sparky Mercantile For the Year Ended December 31, 20x2 $ Blank 1 Income from Continuing Operations Gain/Loss from Discontinued Operations (net of tax) $ Blank 2 Net Income $ Blank 3 E.P.S. Continuing Operations Discontinued Operations $ Blank 4 $ Blank 5 Net Income $ Blank 6 a. Determine Income from Continuing Operations (x2) Using the information presented above, answer the following: Determine Gain/Loss from Discontinued Operations (net of tax) for 20x2: $ *If your answer is a Loss, enter your answer using () parenthesis. Using the information presented above, answer the following: Determine Net Income for 20x2 * Do not use dollar signs or commas when recording your answer. Using the information presented above, answer the following: Determine EPS for Income from Continuing Operations ('x2) $ *round your answer to the nearest full cent. Do not include dollar signs when recording your answer Using the information presented above, determine the following: Determine EPS Discontinued Operations (x2) $ * round your answer to the nearest full cent. Do not use a dollar sign when recording your answer. Using the information presented above, determine the following: Determine EPS for Net Income (x2) $ *round your answer to the nearest full cent. Do not use a dollar sign to record your
