The Following Income Statement Was Reported by Snappy Seacraft Company

question 71

Multiple Choice

The following income statement was reported by Snappy Seacraft Company for the year ending December 31, 2017:
$\begin{array}{|l|r|r|}\hline \text { Sales } & \$ 85,000 & \\\hline \text { Rent revenue } & 23,000 & \\\hline \text { Interest income } & 7,000 & \\\hline \text { Total revenues } & & \$ 115,000 \\\hline \text { Cost of goods sold } & \$52,000& \\\hline \text { Operating expenses } & 24,000& \\\hline \text { Interest expense } &12,000 & \\\hline \text { Loss on sale of fixed asset } & 6,000 & \\\hline \text { Total expenses } & &94,000 \\\hline \text { Income from continuing operations (before tax) } &&\$ 21,000 \\\hline \text { Less: Income tax } & & 10,000\\\hline \text { Income from continuing operations } & &\$ 11,000 \\\hline \text { Income from disposed segment (net of tax) } & & 3,000\\\hline \text { Gain on sale of disposed segment (net of tax) } & & 2,000 \\\hline \text { Net income } & &\$ 16,000 \\\hline & & \\\hline & & \\\hline\end{array}$
Assume Snappy has an average of 25,000 shares of common stock outstanding during 2017. Based on this information, what amount of earnings per share would be reported on the income statement for the disposal of the business segment?

• A)$0.12
• B)$0.20
• C)$0.08
• D)$0.60

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