60.1K

Verified Solution

Link Copied!

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

Answer & Explanation Solved by verified expert

See Answer