Maher AG reported income before income tax during 2022 of €790,000. Additional transactions occurring in 2022 but not considered in the €790,000 are as follows.

1. The company experienced an uninsured flood loss in the amount of €90,000 during the year.

2. At the beginning of 2020, the company purchased a machine for €54,000 (residual value of €9,000) that had a useful life of 6 years. The bookkeeper used straight-line depreciation for 2020, 2021, and 2022 but failed to deduct the residual value in computing the depreciation base.

3. Sale of securities held as a part of its portfolio resulted in a gain of €47,000.

4. The company disposed of its recreational division at a loss of €115,000 before taxes. Assume that this transaction meets the criteria for discontinued operations.

5. The company decided to change its method of inventory pricing from average-cost to the FIFO method. The effect of this change on prior years is to increase 2020 income by €60,000 and decrease 2021 income by €20,000 before taxes. The FIFO method has been used for 2022.

Instructions

Prepare an income statement for the year 2022, starting with income before income tax. Compute earnings per share as it should be shown on the face of the income statement. Ordinary shares outstanding for the year are 120,000 shares. (Assume a tax rate of 30% on all items.)