Esquire Comic Book Company had income before tax of $1,850,000 in 2018 before considering the following material items: A. 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 $435,000. The division generated before-tax income from operations from the beginning of the year through disposal of $670,000. Neither the loss on disposal nor the operating income is included in the $1,850,000 before-tax income the company generated from its other divisions.
B. The company incurred restructuring costs of $90,000 during the year.
Required:
Prepare a 2021 income statement for Esquire beginning with income from continuing operations. Assume an income tax rate of 25% 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, 2021
Income from continuing operations
Discontinued operations:
Income from operations of discontinued component
Income tax expense
Net income (loss)