pronghorn Inc. reported income from continuing operations beforetaxes during 2017 of $790,900. Additional transactions occurring in2017 but not considered in the $790,900 are as follows. 1. Thecorporation experienced an uninsured flood loss in the amount of$98,500 during the year. 2. At the beginning of 2015, thecorporation purchased a machine for $73,800 (salvage value of$12,300) that had a useful life of 6 years. The bookkeeper usedstraight-line depreciation for 2015, 2016, and 2017, but failed todeduct the salvage value in computing the depreciation base. 3.Sale of securities held as a part of its portfolio resulted in aloss of $62,300 (pretax). 4. When its president died, thecorporation realized $159,800 from an insurance policy. The cashsurrender value of this policy had been carried on the books as aninvestment in the amount of $43,910 (the gain is nontaxable). 5.The corporation disposed of its recreational division at a loss of$106,680 before taxes. Assume that this transaction meets thecriteria for discontinued operations. 6. The corporation decided tochange its method of inventory pricing from average-cost to theFIFO method. The effect of this change on prior years is toincrease 2015 income by $57,320 and decrease 2016 income by $21,450before taxes. The FIFO method has been used for 2017. The tax rateon these items is 40%. Prepare an income statement for the year2017 starting with income from continuing operations beforetaxes.
Compute earnings per share as it should be shown on the face ofthe income statement. Common shares outstanding for the year are128,280 shares. (Assume a tax rate of 30% on all items, unlessindicated otherwise.
