Chopra Corporation’s pre-tax accounting income of $726,000 for the year 2020 included the following items:
Depreciation of building
119,000
Loss from discontinued operations
46,000
Unusual, non-recurring gains
157,000
Singh Industries Ltd. would like to purchase Chopra Corporation. In trying to measure Chopra’s normalized earnings for 2020, Singh determines that the building’s fair value is double the book value and that its remaining economic life of the building is the same life that Chopra is using.
Calculate the 2020 normalized pre-tax earnings amount of Chopra Corporation that Singh would use to calculate goodwill. Show details of calculation.
Normalized pre-tax earnings of Chopra Corp.:__________________________