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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

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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: Operating Income (pre-tax) Jan 1, 20x1 - Dec 31, 20x1 Estimated Operating Income (pre-tax) Jan 1, 20x2 - June 30, 20X2 Net Book Value of the Component at Dec 31, 20x1 Fair Value of the Component at Dec 31, 20x1 Estimated Disposal Costs Income Tax Rate 549,000 290,000 3,225,000 3,100,000 120,000 30% 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) 00 shares issued, 500,000 outstanding) Partial Income Statement Sparky Mercantile For the Year Ended December 31, 20x2 Income from Continuing Operations Gain/Loss from Discontinued Operations (net of tax) Net Income $ Blank 1 $ Blank 2 $ Blank 3 E.P.S. Continuing Operations Discontinued Operations $ $ $ Blank 4 Blank 5 Blank 6 Net Income Determine Gain/Loss from Discontinued Operations (net of tax) for 20x2: *If your answer is a Loss, enter your answer using ( parenthesis

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