Use the following items from Diamond Company's income statementto compute its net income:
|
Cost of goods sold
|
$320,000
|
|
Selling, general and administrative expenses
|
75,000
|
|
Miscellaneous income
|
40,000
|
|
Net sales
|
540,000
|
|
Income tax expense
|
55,000
|
|
Net loss from discontinued operations (net of tax)
|
(20,000)
|
|
Cumulative effect of a change in accounting for income taxes(net of tax)
|
50,000
|
What is Diamond Company's net income to be reported on the incomestatement? c) In 2008, Freeborn Company disposed of a segment of itsbusiness and incurred a pre-tax loss on the disposal of$100,000. In the same year, a flood caused $30,000 of damages to abuilding. The flood damage qualified as an extraordinary item.Income from continuing operations before taxes was $260,000for 2008 and the 30 percent tax rate applied to all of the items above.
1. What net income or netloss would the company report for 2008?
2. How wouldthe company report the discontinued operation for 2008? Show work.
A) Loss from discontinued operationsof $100,000.
B) Loss from discontinued operationsof $30,000.
C) Loss from discontinued operationsof $70,000.
D) Loss from discontinued operations of $25,000. 3.
What net income or net loss per share would the company reportfor 2008 if it had 180,000 shares of common stock outstanding?
A) $1.33.
B) $2.33.
C) ($1.87).
D) $.94