Esquire Comic Book Company had income before tax of $1,150,000 in 2016 before considering the following material...

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ESQUIRE COMIC BOOK COMPANY
Partial Income Statement
For the Year Ended December 31, 2016

Income from continuing operations	$648,000
Discontinued operations gain (loss):
Income from operations of discontinued component	$165,000
Income tax expense	($66,000)
Income on discontinued operations	$99,000
Net income	$747,000

Explanation:
Income from operations of discontinued component (including loss on disposal of $365,000) = 165000
Income from continuing operations:
Income before considering additional items	$1,150,000
Decrease in income due to restructuring costs	($70,000)
Before-tax income from continuing operations	$1,080,000
Income tax expense (40%)	($432,000)
Income from continuing operations	$648,000

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1.	Esquire sold one ofits operating divisions, which qualified as a separate componentaccording to generally accepted accounting principles. Thebefore-tax loss on disposal was $365,000. The division generatedbefore-tax income from operations from the beginning of the yearthrough disposal of $530,000. Neither the loss on disposal nor theoperating income is included in the $1,150,000 before-tax incomethe company generated from its other divisions.

2.	The companyincurred restructuring costs of $70,000 during the year.

Required:
Prepare a 2016 incomestatement for Esquire beginning with income from continuingoperations. Assume an income tax rate of 40%. Ignore EPSdisclosures. (Amounts to be deducted should beindicated with a minus sign.)

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