Question

Esquire Comic Book Company had income before tax of $1,000,000 in 2016 before considering the following material items:

 

Esquire sold one of its operating divisions, which qualified as a separate component according to generally accepted accounting principles. The before-tax loss on disposal was $350,000. The division generated before-tax income from operations from the beginning of the year through disposal of $500,000. Neither the loss on disposal nor the operating income is included in the $1,000,000 before-tax income the company generated from its other divisions.

 

Prepare a 2016 income statement for Esquire beginning with income from continuing operations. Assume an income tax rate of 40%. Ignore EPS disclosures.

Income from continuing operations: $552,000

Income from operations of discontinued componet?

Income Tax Expense?

Net Income?

Esquire Comic Book Company had income before tax of $1,000,000 in 2016 before considering the following material items: