Following is information taken from the accounting records of Kagawa Company at the end of 2009.

Question:

Following is information taken from the accounting records of Kagawa Company at the end of 2009.
• Net Sales, $660,000
• Operating Income (from discontinued operations), $64,000
• Cost of Goods Sold, $370,000
• Gain on Sale of Assets (from discontinued operations), $55,000
• Operating Expenses, $134,000
• Flood Loss, $167,000
• Kagawa had 150,000 shares of issued and outstanding throughout the year.
Kagawa’s effective tax rate is 40 percent and is based in an area that does not normally experience ﬂoods. Kagawa’s taxable income from the tax return is $100,000.
Required:
Prepare an income statement for Kagawa Company for 2009, including an earnings-per-share section.
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...