You have recently begun your dream job in the accounting department at Checks and Balances Inc. (C & B). C & B has many different operating divisions, however, you are told that C & B has decided to sell its calculator division. While reviewing the 2020 Management Discussion and Analysis you read that the calculator division is run as a distinct operation with its own financial records. The operating activities of the calculator division as a manufacturer are distinct from C & Bs other divisions which focus on the distribution of educational publications. Calculator production is also the only division operating in the United States, and C & B is looking to centralize operations in Canada. In the past the calculator division has generated 30-35% of the revenue and 8-10% of the profits, which is material to the users of C & Bs financial reporting.

You search through the files of your predecessor and locate the following additional information, though you are cautioned that your predecessor made a lot of mistakes and was fired as a result:

Checks and Balances Inc.
Draft Income statement
For the year ended December 31, 2020
Revenues
Sales revenue	2,345,000
Expenses
Cost of goods sold	849,000
Salaries expense	134,000
Depreciation expense	82,000
Income tax expense on continuing operations	365,000
Loss from operation of calculator division (before tax)	743,000
Loss on disposal of calculator division assets (before tax)	525,000
Net income (loss)	-353,000
Additional notes:
Income tax rate	40%
Number of common shares outstanding during 2020	175,000

Required:

Based on the information provided, is the calculator division a component for the purposes of determining whether this is a discontinued operation? Explain your recommendation. (5 marks)

Assuming the calculator division is a discontinued operation, you are asked to correct the draft income statement provided for the year ended December 31, 2020 (in proper form) and include appropriate

earnings per share disclosure. (15 marks)