Makar Corporation Reported Net Income Before Extraordinary Items and Taxes

question 78

Multiple Choice

Makar Corporation reported net income before extraordinary items and taxes of $200,000 for the year 2010. During 2010, the average number of common shares outstanding was 35,000. Basic net earnings per share for 2010 are reported to be only $2.00. Makar's income tax rate is 30%. How much was Makar's extraordinary gain or loss (before tax) from a major earthquake? The earthquake was the only item that was reported net of tax in the income statement for 2010.

• A) $70,000.
• B) $100,000.
• C) $130,000.
• D) none of the above

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