Question:
The following are partial income statement account balances taken from the December 31, 2013, year-end
trial balance of White and Sons, Inc.: restructuring costs, $300,000; interest revenue, $40,000; loss from
earthquake (unusual and infrequent), $400,000; and loss on sale of investments, $50,000. Income tax
expense has not yet been accrued. The income tax rate is 40%. Prepare the lower portion of the 2013
income statement beginning with $850,000 income before income taxes and extraordinary item. Include
appropriate basic EPS disclosures.
The company had 100,000 shares of common stock outstanding throughout the year.
Answer:
WHITE AND SONS, INC.
Partial Income Statement
For the Year Ended December 31, 2013
Income before income taxes and extraordinary item................................... $ 850,000
Income tax expense* ................................................................................... 340,000
Income before extraordinary item ............................................................... 510,000
Extraordinary item:
Loss from earthquake, net of $160,000 tax benefit................................... (240,000)
Net income .................................................................................................. $ 270,000
Earnings per share:
Income before extraordinary item................................................................ $ 5.10
The following are partial income statement account balances taken from the December 31, 2013, year-end
trial balance of White and Sons, Inc.: restructuring costs, $300,000; interest revenue, $40,000; loss from
earthquake (unusual and infrequent), $400,000; and loss on sale of investments, $50,000. Income tax
expense has not yet been accrued. The income tax rate is 40%. Prepare the lower portion of the 2013
income statement beginning with $850,000 income before income taxes and extraordinary item. Include
appropriate basic EPS disclosures.
The company had 100,000 shares of common stock outstanding throughout the year.
Answer:
WHITE AND SONS, INC.
Partial Income Statement
For the Year Ended December 31, 2013
Income before income taxes and extraordinary item................................... $ 850,000
Income tax expense* ................................................................................... 340,000
Income before extraordinary item ............................................................... 510,000
Extraordinary item:
Loss from earthquake, net of $160,000 tax benefit................................... (240,000)
Net income .................................................................................................. $ 270,000
Earnings per share:
Income before extraordinary item................................................................ $ 5.10
