At December 31, 2011 XYZ Corporation had the following stock outstanding. Preffered stock, $100 par, 7% cumulative,80,000 shares outstanding $8,000,000
Common stock, $5 par 2,000,000 shares 10,000,000
During 2011, XYZ Corp, declared Preffered dividends.The company did not issue any additional common s3.The following also occured during 2011.
Income from continuing operations before tax $4,200,000. Common dividends declared 300,000. Effective tax rate 40%.
XYZ company had two operating divisions. One division had been unprofitable, and on October 1,2011, the company adopted a plan to sell the assets of the unprofitable division. The actual sale was on December 16, 2011 at a price of $1,600,000.The book value of the assets sold was $1,800,000.
The division inccured a before tax operating loss from operations of $400,000 from the beginning of the year through December 16.
Prepare the income statement for 2011 beginning with income from continuing operations. Show all calculations.