For 2014, Silvertip Construction, Inc., reported income from continuing operations (after tax) of $1,650,000 before considering the following information. On November 15, 2014, the company adopted a plan to dispose of a component of the business. This component qualifies for discontinued operations treatment. During 2014, the component had pre-tax operating losses of $95,000. The component’s assets have a book value of $760,000 on December 31, 2014. A recent market value analysis of these assets placed their estimated selling price at $735,000, less a 6% brokerage commission. Management appropriately determines that these assets are impaired and expects to find a buyer for the component and complete the sale early in 2015.

Prepare a partial income statement for Silvertip including EPS disclosures for the year ended December 31, 2014. Begin at income from continuing operations. Assume a 35% income tax rate and 1,000,000 shares of outstanding common stock.

  • CreatedSeptember 10, 2014
  • Files Included
Post your question