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Math  /  Data & Statistics

QuestionQuestion 5 ( 9 points): You are given the following financial information for Manar Corporation, for the year ended 31 December, 2017: \begin{tabular}{|c|c|} \hline & Amount \\ \hline Pre- tax Income from continuing operations & \ 1,000,000 \\ \hline Income tax rate \% (percentage) & - A- \\ \hline Income tax amount & -B- \\ \hline Income from continuing operations & - C \\ \hline & \$ (62,400) \\ \hline Net Income for the year & - D- \\ \hline Number of weighted average common shares outsianding during the year & -E- \\ \hline EPS - from continuing operations & - F . \\ \hline EPS - from discontinued operations & \(0.52)(0.52) \\ \hline EPS-Total & $5.73\$ 5.73 \\ \hline \end{tabular}
Required Compute the missing items (from A to F ), given that the Company has only one type of stock. Show your calculations below, and use the table on the cover page to fill in your answers.

Studdy Solution

STEP 1

1. The pre-tax income from continuing operations is 1,000,000.<br/>2.Theincometaxrateisrepresentedby−A−.<br/>3.Theincometaxamountisrepresentedby−B−.<br/>4.Theincomefromcontinuingoperationsisrepresentedby−C−.<br/>5.Thetotallossfromdiscontinuedoperationsis1,000,000.<br />2. The income tax rate is represented by -A-.<br />3. The income tax amount is represented by -B-.<br />4. The income from continuing operations is represented by -C-.<br />5. The total loss from discontinued operations is (62,400).<br/>6.Thenetincomefortheyearisrepresentedby−D−.<br/>7.Thenumberofweightedaveragecommonsharesoutstandingisrepresentedby−E−.<br/>8.EPSfromcontinuingoperationsisrepresentedby−F−.<br/>9.EPSfromdiscontinuedoperationsis.<br />6. The net income for the year is represented by -D-.<br />7. The number of weighted average common shares outstanding is represented by -E-.<br />8. EPS from continuing operations is represented by -F-.<br />9. EPS from discontinued operations is (0.52).<br/>10.EPSTotalis.<br />10. EPS Total is 5.73.
11. The company has only one type of stock.

STEP 2

1. Calculate the income tax amount (B) and income tax rate (A).
2. Calculate the income from continuing operations (C).
3. Calculate the net income for the year (D).
4. Calculate the number of weighted average common shares outstanding (E).
5. Calculate the EPS from continuing operations (F).

STEP 3

Calculate the income tax amount (B) using the formula:
B=Pre-tax Income×A100 B = \text{Pre-tax Income} \times \frac{A}{100}
Given that the income from continuing operations is:
C=Pre-tax Income−B C = \text{Pre-tax Income} - B
We know that:
C=1,000,000−B C = 1,000,000 - B

STEP 4

Assume C=Income from continuing operations C = \text{Income from continuing operations} .
C=1,000,000−B C = 1,000,000 - B
Rearrange to find B B :
B=1,000,000−C B = 1,000,000 - C

STEP 5

Calculate the income from continuing operations (C) using the EPS Total:
Net Income=C+Total loss from Discontinued operations \text{Net Income} = C + \text{Total loss from Discontinued operations}
D=C−62,400 D = C - 62,400
Given:
EPS Total=DE=5.73 \text{EPS Total} = \frac{D}{E} = 5.73

STEP 6

Substitute D=C−62,400 D = C - 62,400 into the EPS Total equation:
5.73=C−62,400E 5.73 = \frac{C - 62,400}{E}

STEP 7

Calculate the net income for the year (D):
D=C−62,400 D = C - 62,400

STEP 8

Calculate the number of weighted average common shares outstanding (E):
E=C−62,4005.73 E = \frac{C - 62,400}{5.73}

STEP 9

Calculate the EPS from continuing operations (F):
F=CE F = \frac{C}{E}
The calculated values are: - A: Income tax rate (percentage) - B: Income tax amount - C: Income from continuing operations - D: Net Income for the year - E: Number of weighted average common shares outstanding - F: EPS from continuing operations

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