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Presented below is financial information of the Ivanhoe Corporation for 2020. Gain on the sale of...

Presented below is financial information of the Ivanhoe Corporation for 2020. Gain on the sale of investments 128,000 Net sales 36,000,000 Cost of goods sold 24,800,000 Loss on disposal of wholesale division 536,000 Interest revenue 84,000 Loss on operations of wholesale division 552,000 Selling and administrative expenses 6,560,000 Dividends declared on common stock 272,000 Write off of goodwill 624,000 Dividends declared on preferred stock 96,000 Effective tax rate on all items is 35% Ivanhoe Corporation decided to discontinue its wholesale operations and to retain their manufacturing operations. On July 1, Ivanhoe sold the wholesale operations. During 2020, there were 800,000 shares of common stock outstanding all year. Compute each of the following. (Round earnings per share answer to 2 decimal places, e.g. 5.25 and all other answers to 0 decimal places, e.g. 5,275.) 1. Income from operations $ 2. Income before income tax $ 3. Income from continuing operations $ 4. Net income $ 5. Earnings per share $

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Income Statement of Ivanhoe Corporation for 2020

Particulars Amount in ($)
Net sales 36,000,000
Less Cost of Goods sold (24,800,000)
Gross Profit(Income from operations) 11, 200,000

Less Operating expenses

  • Selling and administration expenses

(6,560,000)
Income from Continuing operations 4,640,000
Non-operating or other
Add Interest revenue 84,000
Add Gain on sale of investment 36,000,000
Less Loss on Disposal of wholesale division (536,000)

Less Loss on operations of wholesale division

Less Other extrodinary items

  • Goodwill writeoff

(552,000)

(624,000)
Income Before income tax 39,012,000
Less Income Tax @ 35 (13,654,200)
Income after tax 25,357,800
Less Dividend for preferance stock (96,000)
Net income 25,261,800
/ no. of stock outstanding 800,000
E.P.S 31.58

# Dividends on commonstock are not reported on incomestatement since they are not expenses.

  1. Income from operations = $11,200,000
  2. Income from continuing operations = $4,640,000
  3. Netincome before taxes = $39,012,000
  4. Net income = $25,261,800
  5. EPS = $31.58

ekkarill92 answered 1 year ago
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