Acc421 Intermediate Accounting: E4-7 Presented below are selected ledger accounts of McGraw

Acc421 Intermediate Accounting

E4-7 (Income Statement, EPS)
Presented below are selected ledger accounts of McGraw Corporation as of December 31, 2010.
Cash 50,000
Administrative expenses 100,000
Selling expenses 80,000
Net sales 540,000
Cost of goods sold 260,000
Cash dividends declared (2010) 20,000
Cash dividends paid (2010) 15,000
Discontinued operations (loss before income taxes) 40,000
Depreciation expense, not recorded in 2009 30,000
Retained earnings, December 31, 2009 90,000
Effective tax rate 30%

a. Compute net income for 2010. (List multiple entries from largest to smallest amount, e.g. 10, 5, 2. Enter all amounts as positive amounts and subtract where necessary.)
b. Prepare a partial income statement beginning with income from continuing operations before income tax, and including appropriate earnings per share information. Assume 20,000 shares of common stock were outstanding during 2010. (Round earnings per share to 2 decimal places, e.g. 5.25 and all other answers to zero decimal places, e.g. 2,250. For earnings per share use either a negative sign preceding the number, e.g. 0.45 or parenthesis, e.g. (0.45) for negative numbers. Enter all other amounts as positive amounts and subtract where necessary.)
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