On October 1, 2020, Blain Company approved a formal plan to sell the McKay Division, considered a compo Exercise 3-41 nent of the business. The sale will occur on March 31, 2021. The division had operating income of $500,000 Reporting Discontinued (pretax) for the year ended December 31, 2020, but expects to incur an operating loss of S100.000 for the first Operations-sposal quarter of 2021. Blain determines the carrying value and fair value (net of selling costs) of the McKay Division in Subsequent Year LO3 to be $5,000,000 and $4,800,000, respectively, on December 31, 2020. Blain's tax rate for 2020 is 25%. Weighted average number of common shares outstanding in 2020 is 300,000 Required Assume Blain Company's income from continuing operations is $2,300,000. Prepare a partial income state- ment beginning with income from continuing operations. Include earnings per share disclosures. b. How does the answer to part a change if the fair value of the McKay Division's net assets were $5,200,000 instead of $4,800,000 on December 31, 2020