Question

Zeus Company reports the following for the current year: Income from continuing operations before income tax...

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 $

Homework Answers

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
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