Bonita Inc. reported income from continuing operations before
taxes during 2020 of $790,900. Additional transactions occurring in
2020 but not considered in the $790,900 are as follows.
1.
The corporation experienced
an uninsured flood loss in the amount of $98,500 during the
year.
2.
At the beginning of 2018, the
corporation purchased a machine for $73,800 (salvage value of
$12,300) that had a useful life of 6 years. The
bookkeeper used straight-line depreciation for 2018, 2019, and
2020, but failed to deduct the salvage value in computing the
depreciation base.
3.
Sale of securities held as a
part of its portfolio resulted in a loss of
$62,300 (pretax).
4.
When its president died, the
corporation realized $159,800 from an insurance policy. The
cash surrender value of this policy had been carried on the books
as an investment in the amount of $43,910 (the gain is
nontaxable).
5.
The corporation disposed of
its recreational division at a loss of $106,680 before taxes.
Assume that this transaction meets the criteria for discontinued
operations.
6.
The corporation decided to
change its method of inventory pricing from average-cost to the
FIFO method. The effect of this change on prior years is to
increase 2018 income by $57,320 and decrease 2019 income by
$21,450 before taxes. The FIFO method has been used for 2020.
The tax rate on these items is 30%.
Prepare an income statement for the year 2020 starting with income
from continuing operations before taxes. Compute earnings per share
as it should be shown on the face of the income statement. Common
shares outstanding for the year are 128,280 shares.
(Assume a tax rate of 30% on all items, unless indicated
otherwise.) (Round earnings per share to 2 decimal
places, e.g. 1.48 and all other answers to 0 decimal places, e.g.
5,275.)