QUESTION 2

1. On May 1, 2015, Foxtrot Co. agreed to sell the assets of its Footwear Division for $80 million. The division qualified as a separate component of the entity. The sale was completed on December 31, 2015. The book value of Footwear's assets totaled $48 million on the date of the sale. Footwear's operating income was a pre-tax loss of $10 million in 2015. Foxtrot's income tax rate is 40%. Foxtrot's after-tax income from its continuing operations is $50,000,000.

Required:

Prepare Foxtrot's income statement for 2015 beginning with "income from continuing operations." Include appropriate EPS disclosures assuming that 100,000 shares of common stock were outstanding throughout the year. Show calculations.

Foxtrot Co.

Partial Income Statement

For the year ended 12/31/2015