Problem - Income Statement, EPS
Presented below are selected ledger accounts of McGraw Corporation as of December 31, 2010.
|
Cash
|
$50,000
|
|
Administrative expenses
|
100,000
|
|
Selling expenses
|
80,000
|
|
Net sales
|
547,500
|
|
Cost of goods sold
|
223,100
|
|
Cash dividends declared (2010)
|
20,000
|
|
Cash dividends paid (2010)
|
15,000
|
|
Discontinued operations (loss before income taxes)
|
46,200
|
|
Depreciation expense, not recorded in 2009
|
30,000
|
|
Retained earnings, December 31, 2009
|
90,000
|
|
Effective tax rate
|
30%
|
(a) Compute net income for 2010.
(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 2010.