Esquire Comic Book Company had income before tax of $1,700,000 in 2016 before considering the following material items: 1. Esquire sold one of its operating divisions, which qualified as a separate component according to generally accepted accounting principles. The before-tax loss on disposal was $420,000. The division generated before-tax income from operations from the beginning of the year through disposal of $640,000. Neither the loss on disposal nor the operating income is included in the $1,700,000 before-tax income the company generated from its other divisions.
2. The company incurred restructuring costs of $75,000 during the year.
Required:
Prepare a 2016 income statement for Esquire beginning with income from continuing operations. Assume an income tax rate of 40%. Ignore EPS disclosures. (Amounts to be deducted should be indicated with a minus sign.)
ESQUIRE COMIC BOOK COMPANY
Partial Income Statement
For the Year Ended December 31, 2016
Income from continuing operations $ 552,000
Discontinued operations gain (loss)
Loss from operations of discontinued component (552,000)
Loss from operations of discontinued component (300,000)
Income tax expense 210,000
Income on discontinued operations (642,000)
Net loss $ 642,000)

                    Esquire Comic Book Company

                               Income Statement

                For the Year Ended December 31, 2016

Income from continuing operations                                  $1,700,000

Restructuring costs                                                               ($75,000)

Income form continuing operations before taxes            $1,625,000

Income taxes                                                                       ($650,000)

Net income from continuing operations                             $975,000

Discontinued operations:

Income from discontinued operations                                $640,000

Loss on disposal of division                                               ($420,000)

Income from discontinued operations before taxes         $220,000

Income taxes                                                                         ($88,000)

Net income from discontinued operations                         $132,000

Total net income                                                                $1,107,000

cash flow statement possibly

due to the changes the federal reserve is making the unused reserves will impact the economy by them facing inflation. inflation is definfed as the increase in pricing of a good or service but the decline of the value of money used for purchasing those items. when the economy has a high inflation rate, they are subject to money loss and hurt on the economy.