FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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For the year ending December 31, 2024, Olivo Corporation had income from continuing operations before taxes of $1,380,000 before considering the following transactions and events. All of the items described below are before taxes and the amounts should be considered material.
- In November 2024, Olivo sold its PizzaPasta restaurant chain that qualified as a component of an entity. The company had adopted a plan to sell the chain in May 2024. The income from operations of the chain from January 1, 2024, through November was $178,000 and the loss on sale of the chain’s assets was $336,000.
- In 2024, Olivo sold one of its six factories for $1,560,000. At the time of the sale, the factory had a book value of $1,280,000. The factory was not considered a component of the entity.
- In 2022, Olivo’s accountant omitted the annual adjustment for patent amortization expense of $138,000. The error was not discovered until December 2024.
Required:
Prepare Olivo’s income statement, beginning with income from continuing operations before taxes, for the year ended December 31, 2024. Assume an income tax rate of 25%. Ignore EPS disclosures.
Note: Amounts to be deducted should be indicated with a minus sign.
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