Question

Woodland Farm Corporation has the following items to include in its financial statements:


None of the listed amounts includes any income tax effects. The company’s tax rate is 35 percent.

REQUIRED:
a. Describe how each item above would be disclosed on the income statement or statement of retained earnings.
b. Compute the tax effect of each of the items that should be disclosed net of tax. What dollar amount would be shown on the financial statements for each of these items?
c. Assume that income from continuing operations (after tax) was $600,000, and 200,000 shares of common stock were outstanding during the year. Provide the earnings-per-sharecalculation.


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  • CreatedAugust 19, 2014
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