Brief Exercise 45 Bramble Corporation had income from operat

Brief Exercise 4-5

Bramble Corporation had income from operations of $6,285,800. In addition, it suffered an unusual and infrequent pretax loss of $781,200 from a volcano eruption, interest revenue of $15,910, and a write-down on buildings of $50,000. The corporation’s tax rate is 30%. Prepare a partial income statement for Bramble beginning with Income from operations. The corporation had 4,961,500 shares of common stock outstanding during 2017. (Round earnings per share to 2 decimal places, e.g. 1.48.)

Solution

Income from operations $ 6,285,800 Financial Revenue : interest revenue $ 15,910 Impairment Loss on Buildings ($ 50,000) Income before tax & extraordinary items $ 6,251,710 Income Tax expense ($ 6,251,710 * 30%) ($ 1,875,513) Income from continuing operations $ 4,376,197 Extraordinary loss net of (781200 * 30%=$234,360) tax ($ 546,840) Net Income (a) $ 3,829,357 No. of Shares of Common stock Outstanding (b) 4,961,500 Earnings Per Share (a / b) $ 0.77