Problem 1. If a Company had Pretax Earnings from Continuing Operations of $150,000, a Loss from Discontinued Operations of ($30,000) and an Extraordinary gain from an Earthquake of $20,000 and a weighted average number of Common Shares Outstanding (no Preferred Stock) of 100,000 shs, how would the EPS (Earnings per sh) Statistics be presented on the Income Statement? The Company's Tax rate is 30%.
Problem 2. Does Earnings Management fit with GAAP?