Pronghorn Corporation had income from continuing operations of $12,100,000 in 2017. During 2017, it disposed of its restaurant division at an after-tax loss of $208,000. Prior to disposal, the division operated at a loss of $412,000 (net of tax) in 2017 (assume that the disposal of the restaurant division meets the criteria for recognition as a discontinued operation). Pronghorn had 10,000,000 shares of common stock outstanding during 2017. Prepare a partial income statement for Pronghorn beginning with income from continuing operations. (Round earnings per share to 2 decimal places, e. g. 1.48.)

Question

Marge

Business

28 October, 05:54

Pronghorn Corporation had income from continuing operations of $12,100,000 in 2017. During 2017, it disposed of its restaurant division at an after-tax loss of $208,000. Prior to disposal, the division operated at a loss of $412,000 (net of tax) in 2017 (assume that the disposal of the restaurant division meets the criteria for recognition as a discontinued operation). Pronghorn had 10,000,000 shares of common stock outstanding during 2017. Prepare a partial income statement for Pronghorn beginning with income from continuing operations. (Round earnings per share to 2 decimal places, e. g. 1.48.)

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Colin · Answer 1

Net Income = $11,480,000

Earnings Per Share = $1.148

Explanation:

The question is to determine Pronghorn's Corporation's Partial Income Statement

Pronghorn's Income Statement for the year 2017

Description Amount ($) Amount ($)

Continuing Operations Income 12,100,000

Discontinued Operations:

Discontinued Restaurant division's Loss 412,000

Loss on Restaurant's Disposal 208,000

The total loss on discontinued operations (620,000)

Net Income $11,480,000

Part 2 is to determine the Earnings Per share as follows

What is the income per share = $12,100,000 / 10,000,000 shares

= $1.21

what is the loss per share on discontinued restaurant division

= $620,000/10,000,000 = $0.062

Earnings Per Share = $1.21 - $0.062 = $1.148