In the press release announcing Disneys results for the quarter ending July 2, 2005, the company stated

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In the press release announcing Disney’s results for the quarter ending July 2, 2005, the company stated the following: The Walt Disney Company today reported earnings for the quarter and nine months ended July 2, 2005. Diluted earnings per share (EPS) for the third quarter increased 41% to $0.41, compared to $0.29 in the prior-year quarter. . . .

Current quarter EPS included a $26 million gain on the sale of the Mighty Ducks of Anaheim, a $32 million partial impairment charge for a cable television investment in Latin America, and a $24 million write-down related to the MovieBeam venture. In aggregate, these items reduced current quarter EPS by $0.01 per share. The prior-year quarter’s EPS included restructuring and impairment charges of $56 million, or $0.02 per share, recorded in connection with the disposition of the Disney Stores North America.

1. How did Disney arrive at the 41% increase?

2. Suppose none of the non-operating transactions disclosed in the second paragraph had occurred in the third quarter of 2005 or the third quarter of 2004. Compute the EPS increase.

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1 041 029 012 012029 41 2 2005 results 041 001 040 20...View the full answer

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Intermediate Accounting

ISBN: 978-0324312140

16th Edition

Authors: James D. Stice, Earl K. Stice, Fred Skousen

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Question Posted: Apr 07, 2012 06:25 AM

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In the press release announcing Disneys results for the quarter ending July 2, 2005, the company stated

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