Tom Brown, controller of Microbiology Labs, informs you that the company has sold a segment of its

Question:

Tom Brown, controller of Microbiology Labs, informs you that the company has sold a segment of its business. Mr. Brown also provides you with the following information for 2018:Continuing Operations Discontinued Segment Sales $10,000,000 $850,000 Cost of goods sold 600,000 2,500,000 Operating expThe following information is not reflected in any of the above amounts:
1. Microbiology Labs is subject to a 35 percent tax rate.
2. During 2018, Microbiology Labs retired outstanding bonds that were to mature in 2020. The company incurred a loss of $80,000 on the retirement of the bonds.
3. Microbiology Labs owns several apple orchards as part of its operations. During 2018, the company€™s apple crop was destroyed by an infestation of a rare insect. This loss totaled $800,000.
4. Two million shares of common stock were outstanding throughout 2018.


REQUIRED:
Prepare an income statement for the year ended December 31, 2018, including the recommended earnings per-share disclosures. In terms of the objectives of financial accounting, comment on the usefulness of each of the different measures of income.

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...
Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question
Question Posted: