Financial & Managerial Accounting 17th Edition by Jan Williams ,Susan Haka,Mark Bettner,Joseph Carcello

Exercise 50

Pacific Airlines operated both an airline and several rental car operations located near airports. During the year just ended, all rental car operations were discontinued and the following operating results were reported:
The extraordinary loss resulted from the destruction of an airliner by terrorists. Pacific Airlines had 4,000,000 shares of capital stock outstanding throughout the year.
Instructions
a. Prepare a condensed income statement, including proper presentation of the discontinued rental car operations and the extraordinary loss. Include all appropriate earnings per share figures.
b. Assume that you expect the profitability of Pacific's airline operations to decline by 10 percent next veal and the profitability of-the rental car operation to decline by 10 percent. What is your estimate of the company's net earnings per share next year?