Prepare an income statement.
The following balances appeared in the general ledger for Hacky Sak Corporation at fiscal year end September 30, 2008:
|
Selling and administrative expenses
|
$ 2s,000
|
|
Other revenues and gains
|
50,000
|
|
Operating expenses
|
75,000
|
|
Cost of goods sold
|
135,000
|
|
Net sales
|
375,000
|
|
Other expenses and losses
|
15,000
|
In addition, the following occurred throughout the year.
1. On April 10, a tornado destroyed one of the company's manufacturing plants resulting in an extraordinary loss of $55,000.
2. On July 31, the company discontinued one of its unprofitable segments. The loss from operations was $25,000. The assets of the segment were sold at a gain of $15,000.
Required
a. Assume Hacky Sak's income tax rate is 40Vo; prepare the income statement for the year ended September3 0, 2008.
b. Calculate the earnings per share the company would report on the income statement assuming Hacky Sak had a weighted average of 200,000 shares of common stock outstanding during the year and paid preferred dividends of $5,000.