Question

Zeus Company reports the following for the current year:

Income from continuing operations before income tax	$500,000
Loss from discontinued operations	$90,000*
Weighted average number of common shares outstanding	40,000
Applicable tax rate	40%

*Net of any tax effect

Required:

1. Prepare a partial income statement for Zeus Company beginning with income from continuing operations before income tax.

Zeus Inc.
Partial Income Statement
For the Year Ended December 31
	$
	$
	$

2. Calculate the earnings per common share for Zeus, including per-share amount for unusual items. Round your answers to two decimal places.

Zeus Inc.
Partial Income Statement
For the Year Ended December 31
Earnings per common share:
Income from continuing operations	$
Loss from discontinued operations
Net Income	$

Answer 1

Partial income statement for Zeus Company

Zeus Inc.
Partial Income Statement
For the Year Ended December 31
Income from continuing operations before income tax	$500,000
Income tax expense	- 200,000
Income from continuing operations after income tax	$300,000
Loss from discontinued operations, net of taxes	- 90,000
Net income	$210,000

2. Calculation of earnings per common share for Zeus,

Zeus Inc.
Partial Income Statement
For the Year Ended December 31
Earnings per common share:
Income from continuing operations	$300,000/40,000 = 7.5
Loss from discontinued operations	- 90,000/40,000 = - 2.25
Net Income	$5.25