Problem 6 Canton Corporation reported the following items in

Problem 6- Canton Corporation reported the following items in its adjusted trial balance for the year ended December 31, 2018 Income from continuing operations before income taxes Gain on disposal of discontinued component Loss from operations of discontinued component S110,000 28,000 (50,000) Canton is subject to a 30% tax rate. Required: Prepare the December 31. 2018, income statement for Canton Corporation, starting with income from continuing operations before income taxes Canton Corporation Income Statement (partial) For the year ended December 31, 2018 from continuing operations ncome taxes Income tax from continuing operations operations . from operations of discontinued component (including Income tax - on discontinued operations Net Problem 7 - Use this information to answer the following questions: Plano Co. 12/31/2018 Partial Trial Balance Data Sales revenue Interest revenue Gain on sale of investments Cost of goods sold Selling expenses Interest expense General and administrative expenses 700,000 60,000 110,000 500.000 50.000 30,000 100,000 Plano had $0,000 shares of stock outstanding throughout the year. Income tax expense has not yet beer accrued. The effective tax rate is 30%. 168) Required: Prepare a multiple-step income statement with earnings per share disclosure.

Solution

Answer 6. Canton Corporation Income Statement (Partial) For the Year Ended Dec 31, 2018 Income from Continuing Operations before Income Tax    110,000.00 Income Tax - $110,000 X 30%    (33,000.00) Income from Continuing Operations      77,000.00 Discontinued Operations: Loss from Operations of Discontinued Component    (22,000.00) Income Tax Benfit - $22,000 X 30%        6,600.00 Loss on Discontinued Operations    (15,400.00) Net Income      61,600.00 Answer 7. Plano Co. Income Statement For the Year Ended Dec 31, 2018 Sales Revenue    700,000.00 Cost of Goods Sold    500,000.00 Gross Profit    200,000.00 Operating Expenses: Selling Expenses    150,000.00 General & Administrative Expenses    100,000.00 Total Operating Expenses    250,000.00 Operating Income (Loss)    (50,000.00) Other Income (expenses): Gain on sale of Investments    110,000.00 Interest Revenue      60,000.00 Interest Expense    (30,000.00) Total Income    140,000.00 Net Income before Income Tax      90,000.00 Income Tax Expense - $90,000 X 30%      27,000.00 Net Income      63,000.00 EPS - $63,000 / 50,000 Shares                 1.26