MotoSport, Inc., produces and sells off-road motorcycles and jeeps. The following data were selected from the records of MotoSport, Inc., for the current fiscal year ended October 31, 2006:
Advertising expense .......................$ 64,000
Cost of merchandise sold ......................612,400
Depreciation expense—office equipment ................7,000
Depreciation expense—store equipment ...............23,000
Gain on condemnation of land ..................36,400
Income tax:
Applicable to continuing operations ................92,500
Applicable to loss from discontinued operations (reduction) ........12,000
Applicable to gain on condemnation of land ...............13,400
Interest revenue ........................12,000
Loss from discontinued operations ..................31,000
Loss from fixed asset impairment ..................110,000
Miscellaneous administrative expense ................12,000
Miscellaneous selling expense .....................5,500
Office salaries expense ......................75,000
Rent expense .........................24,000
Restructuring charge ......................14,000
Sales ...........................1,350,000
Sales salaries expense .....................140,000
Store supplies expense ........................6,500
Unrealized loss (net of tax) on temporary investments ..........7,000
Instructions
Prepare a multiple-step income statement, concluding with a section for earnings per share (rounded to the nearest cent) in the form illustrated in this chapter. There were 25,000 shares of common stock (no preferred) outstanding throughout the year. Assume that the gain on the condemnation of land is an extraordinary item.