Presented below are selected ledger accounts of McGraw SA as of December 31, 2022.
Cash …………………………………………………………………………….. € 50,000
Administrative expenses ………………………………………………. 100,000
Selling expenses …………………………………………………………….. 80,000
Net sales ………………………………………………………………………. 540,000
Cost of goods sold ………………………………………………………… 260,000
Cash dividends declared (2022) ………………………………………. 20,000
Cash dividends paid (2022) ……………………………………………… 15,000
Discontinued operations (loss before income tax) …………… 40,000
Depreciation expense, not recorded in 2021 ……………………. 30,000
Retained earnings, December 31, 2021 …………………………….. 90,000
Effective tax rate ………………………………………………………………….. 30%
Instructions
a. Compute net income for 2022.
b. Prepare a partial income statement beginning with income before income tax, and include appropriate earnings per share information. Assume 20,000 ordinary shares were outstanding during 2022.
