The following data were selected from the records of Healthy Pantry, Inc., for the current fiscal year ended June 30, 2006:
Advertising expense ...................$ 46,000
Cost of merchandise sold ..................279,000
Depreciation expense—office equipment ............6,000
Depreciation expense—store equipment ...........31,000
Gain on discontinued operations ..............42,500
Income tax:
Applicable to continuing operations ............32,000
Applicable to gain on discontinued operations ........16,000
Applicable to loss on condemnation of land (reduction) ......8,000
Insurance expense .....................9,000
Interest expense ......................18,000
Loss from condemnation of land .............24,500
Loss from fixed asset impairment ............$ 90,000
Miscellaneous administrative expense .............7,500
Miscellaneous selling expense ................5,500
Office salaries expense .................60,000
Rent expense .......................29,000
Restructuring charge ..................150,000
Sales .........................980,000
Sales commissions expense ................145,000
Unrealized gain (net of tax) on temporary investments ......25,000
Instructions
Prepare a multiple-step income statement, concluding with a section for earnings per share in the form illustrated in this chapter. There were 75,000 shares of common stock (no preferred) outstanding throughout the year. Assume that the loss on the condemnation of land is an extraordinary item.