AE4-7

Your answer is incorrect. Try again.

(Income Statement, EPS) Presented below are selected ledger accounts of McGraw Corporation as of December 31, 2012. Cash Administrative expenses Selling expenses Net sales Cost of goods sold Cash dividends declared (2012) Cash dividends paid (2012) Discontinued operations (loss before income taxes) Depreciation expense, not recorded in 2011 Retained earnings, December 31, 2011 Effective tax rate 30% $ 50,000 100,000 80,000 553,800 226,200 20,000 15,000 49,400 30,000 90,000

(a) Compute net income for 2012. (List multiple entries from largest to smallest amount, e.g. 10, 5, 2. Enter all amounts as positive amounts and subtract where necessary.)
Net sales resp_0 553,800

Less: Cost of goods sold

resp_0

226,200

Administrative expenses resp_0 100,000

Selling expenses resp_0 80,000

Discontinued operations-loss resp_0 49,400

98,200

Income before taxes

Income tax resp_0 29,460

68,740

Net income

(b) Prepare a partial income statement beginning with income from continuing operations before income tax, and including appropriate earnings per share information. Assume 20,000 shares of common stock were outstanding during 2012. (Round earnings per share to 2 decimal places, e.g. 5.25 and all other answers to zero decimal places, e.g. 2,250. For earnings per share use either a negative sign preceding the number, e.g. 0.45 or parenthesis, e.g. (0.45) for negative numbers. Enter all other amounts as positive amounts and subtract where necessary.) Income from continuing operations before income tax $
Income tax 98,200

Less: resp_0

29,460

68,740

Income from continuing operations

Discontinued operations-less applicable income tax

Net income Earnings per share:

68,740

Income from continuing operations

Loss on discontinued operations, net of tax

Net income