The following information is taken from the draft financial statement of Star Inc at their November 30, 2015 year-end.

• Income from continuing operations before taxes is $5,100,000.
• The average tax rate for the company is 26%.
• There are 190,000 common shares outstanding.
• Star Inc follows IFRS.

Additional transactions which are not included in the above figures are as follows:

1. Obsolete inventory was written off for $455,000.
2. A prior period lawsuit, which had been deemed unlikely and unestimable, was settled and the company received $310,000.
3. Equipment costing $690,000, with a book value of $258,000 was sold for $301,000.
4. Disposal of a division generated a $210,000 loss before tax.
5. The fair value of Available for Sale (AFS) investments increased by a pre-tax amount of $16,000.
6. An underestimation of bad debts from 2011 totalling $2,000 was found and charged to retained earnings. This was due to a calculation error.

Please make sure your final answers are accurate to the nearest whole number unless otherwise stated.

a) Calculate income before tax and discontinued operations.

b) Calculate net income before discontinued operations.

c) Calculate net income.

d) Calculate comprehensive income/loss.

e) Calculate earnings per common share (EPS) from net income. Please make sure your final answer(s) are accurate to 2 decimal places.

Answer rating: 100% (QA)

Ans a Determine income before taxes and operations that ha... View the full answer