USE THE FOLLOWING INFORMATION TO ANSWER THE ENTIRE QUESTION:

On August 1, 2018, Sparky Mercantile adopted a plan to discontinue its childrens 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, 2019. On December 31, 2018, Sparkys fiscal year-end, the following information relative to the discontinued operation was accumulated:

Operating Income (pre-tax) Jan 1, 2018 - Dec 31, 2018	$ 549,000
Estimated Operating Income (pre-tax) Jan 1, 2019 June 30, 2019	290,000
Net Book Value of the Component	3,225,000
Fair Value of the Component	3,100,000
Estimated Disposal Costs	120,000
Income Tax Rate	30%

PART A

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 2018 footnotes (if any): $___________________

*If an impairment loss is indicated, just record your answer as a positive number. Do not use commas or dollar signs.

PART B

Using the information presented in Part A above, determine the following:

In its Income Statement for the year ended December 31, 2018, 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.

PART C

USE THE INFORMATION FROM PARTS A&B ABOVE, AND THE FOLLOWING INFORMATION

Sparky finalized the sale of the component on June 30, 2019 for net cash proceeds of $2,700,000. Actual operating income of the discontinued component from Jan 1 Jun 30, 2019, 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, 2019 beginning with Income from Continuing Operations. Include Earnings Per Share disclosures.

Additional Data:

Income Before Taxes (19) $1,900,000

Income Tax Rate (19) 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, 2019

Income from Continuing Operations $ Blank 1

Gain/Loss from Discontinued Operations (net of tax) $ Blank 2

Net Income $ Blank 3

E.P.S.

Continuing Operations $ Blank 4

Discontinued Operations $ Blank 5

Net Income $ Blank 6

1. Determine Income from Continuing Operations ('19) $_____________________

PART D

Using the information presented above, answer the following:

Determine Gain/Loss from Discontinued Operations (net of tax) for 2019: $_____________________

*If your answer is a Loss, enter your answer using () parenthesis.

PART E

Using the information presented above, answer the following:

Determine Net Income for 2019 $_____________________

*Do not use dollar signs or commas when recording your answer.

PART F

Using the information presented above, answer the following:

Determine EPS for Income from Continuing Operations ('19) $ _____________________

*round your answer to the nearest full cent. Do not include dollar signs when recording your answer

PART G

Using the information presented above, determine the following:

Determine EPS Discontinued Operations ('19) $_____________________

*round your answer to the nearest full cent. Do not use a dollar sign when recording your answer. If you determined there was a Loss from Discontinued Operations, enter your answer using () parenthesis.

PART H

Using the information presented above, determine the following:

Determine EPS for Net Income ('19) $_____________________

*round your answer to the nearest full cent. Do not use a dollar sign to record your answer.