Question

The Esposito Import Company had 1 million shares of common stock outstanding during 2021. Its income statement reported the following items: income from continuing operations, $7 million; loss from discontinued operations, $1.4 million. All of these amounts are net of tax. Required: Prepare the 2021 EPS presentation for the Esposito Import Company. (Amounts to be deducted should be indicated with a minus sign. Round your answers to 2 decimal places.)

Answer 1

Step-by-step explanation:

The preparation of the 2021 EPS presentation for the Esposito Import Company is shown below:

Income from continuing operations $7 million

Less: Loss from discontinued operations ($1.4 million)

Net income $5.6 million

Now the earning per share would be

Earning per share = (Net income) ÷ (Number of shares)

= ($5.6 million) ÷ (1 million shares)

= $5.6 per share