Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Windsor Corp. has 149,520 shares of common stock outstanding. In 2020, the company reports income from continuing operations before income tax of $1,229,200. Additional transactions

image text in transcribed

Windsor Corp. has 149,520 shares of common stock outstanding. In 2020, the company reports income from continuing operations before income tax of $1,229,200. Additional transactions not considered in the $1,229,200 are as follows. 1. In 2020, Windsor Corp. sold equipment for $36,200. The machine had originally cost $83,500 and had accumulated depreciation of $31,600. The gain or loss is considered non-recurring. 2. The company discontinued operations of one of its subsidiaries during the current year at a loss of $194,300 before taxes. Assume that this transaction meets the criteria for discontinued operations. The loss from operations of the discontinued subsidiary was $91,600 before taxes; the loss from disposal of the subsidiary was $102,700 before taxes. 3. An internal audit discovered that amortization of intangible assets was understated by $38,100 (net of tax) in a prior period. The amount was charged against retained earnings. 4. The company recorded a non-recurring gain of $129,900 on the condemnation of some of its property (included in the $1,229,200). Analyze the above information and prepare an income statement for the year 2020, starting with income from continuing operations before income tax. Compute earnings per share as it should be shown on the face of the income statement. (Assume a total effective tax rate of 19% on all items, unless otherwise indicated.) (Round earnings per share to 2 decimal places, eg. 1.47.) WINDSOR CORP. Income Statement (Partial) For the Year Ended December 31, 2020 - Income From Continuing Operations Before Income Tax + $ 1213500 230565 i Income Tax Income From Continuing Operations 982935 Discontinued Operations Loss from Operations of Discontinued Subsidiary 91600 i 9 17404 i $ 74196 i Less 4) Applicable Income Tax Reduction Loss from Disposal of Subsidiary Less 4 : Applicable Income Tax Reduction 102700 195131 8 3187 i 157383 i 825552 Income From Continuing Operations Before Income Tax $ Loss from Operations of Discontinued Subsidiary Gain on Condemnation 129900 Income Tax 24681 Net Income /(Loss) 930771

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting Concepts And Applications

Authors: W. Steve Albrecht, James D. Stice, Earl K. Stice, Monte R. Swain

10th Edition

0324376154, 978-0324376159

More Books

Students also viewed these Accounting questions

Question

What other blunt questions do you think would be appropriate?

Answered: 1 week ago