Wilcox Corporation had income from continuing operations of $747,320 (after taxe

Question

Wilcox Corporation had income from continuing operations of $747,320 (after taxes) in 2014. In addition, the following information, which has not been considered, is as follows.

Present in good form the income statement of Wilcox Corporation for 2014 starting with "income from continuing operations." Assume that Wilcox's tax rate is 30% and 200,000 shares of common stock were outstanding during the year

1. In 2014, Wilcox experienced an uninsured earthquake loss in the amount of $282,600. 2. A machine was sold for $132,600 cash during the year at a time when its book value was $104,330. (Depreciation has been properly recorded.) The company often sells machinery of this type. 3. Wilcox decided to discontinue its stereo division in 2014. During the current year, the loss on the disposal of this component of the business was $155,610 less applicable taxes.

Explanation / Answer

Wilcox Corporation Income Statement For the year ended Amount ($) Income from continuing operations $747,320 Gain on sale of machinery (After tax of 30%) 19,789 Income from continuing operations 767,109 Discontinued operations    Loss on disposal of this component of business,less applicable income taxes 46,683 108,927 Income before extraordinary items 658,182 Extraordinary loss, net of income taxes of $84,780 197,820 Net Income 460,362 Per share of common stock- Income from continuing operations 3.835545    Discontinued operations net of tax 0.544635    Income before extraordinary items 3.29091    Extraordinary loss, net of income taxes 0.9891 Net Income 2.30181

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