Selected account balances from the adjusted trial balance for Olinda Corporation as of its calendar year-end December 31 follow. Assume that the company’s income tax rate is 40% for all items. Debit Credit a. Interest revenue $ 14,400 b. Depreciation expense—Equipment $ 34,400 c. Loss on sale of equipment 26,250 d. Accounts payable 44,400 e. Other operating expenses 106,800 f. Accumulated depreciation—Equipment 72,000 g. Gain from settlement of lawsuit 44,400 h. Accumulated depreciation—Buildings 175,300 i. Loss from operating a discontinued segment (pretax) 18,650 j. Gain on insurance recovery of tornado damage 29,520 k. Net sales 1,002,500 l. Depreciation expense—Buildings 52,400 m. Correction of overstatement of prior year’s sales (pretax) 16,400 n. Gain on sale of discontinued segment’s assets (pretax) 36,000 o. Loss from settlement of lawsuit 24,150 p. Income tax expense ? q. Cost of goods sold 486,500 2a. What is the amount of income from continuing operations before income taxes? 2b. What is the amount of the income tax expense? 2c. What is the amount of income from continuing operations?
Selected account balances from the adjusted trial balance for Olinda Corporation as of its calendar year-end December 31 follow. Assume that the company’s income tax rate is 40% for all items. Debit Credit a. Interest revenue $ 14,400 b. Depreciation expense—Equipment $ 34,400 c. Loss on sale of equipment 26,250 d. Accounts payable 44,400 e. Other operating expenses 106,800 f. Accumulated depreciation—Equipment 72,000 g. Gain from settlement of lawsuit 44,400 h. Accumulated depreciation—Buildings 175,300 i. Loss from operating a discontinued segment (pretax) 18,650 j. Gain on insurance recovery of tornado damage 29,520 k. Net sales 1,002,500 l. Depreciation expense—Buildings 52,400 m. Correction of overstatement of prior year’s sales (pretax) 16,400 n. Gain on sale of discontinued segment’s assets (pretax) 36,000 o. Loss from settlement of lawsuit 24,150 p. Income tax expense ? q. Cost of goods sold 486,500 2a. What is the amount of income from continuing operations before income taxes? 2b. What is the amount of the income tax expense? 2c. What is the amount of income from continuing operations?
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter18: Accounting For Income Taxes
Section: Chapter Questions
Problem 18GI
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Question
Selected account balances from the adjusted
| Debit | Credit | ||
|---|---|---|---|
| a. | Interest revenue | $ 14,400 | |
| b. | Depreciation expense—Equipment | $ 34,400 | |
| c. | Loss on sale of equipment | 26,250 | |
| d. | Accounts payable | 44,400 | |
| e. | Other operating expenses | 106,800 | |
| f. | Accumulated depreciation—Equipment | 72,000 | |
| g. | Gain from settlement of lawsuit | 44,400 | |
| h. | Accumulated depreciation—Buildings | 175,300 | |
| i. | Loss from operating a discontinued segment (pretax) | 18,650 | |
| j. | Gain on insurance recovery of tornado damage | 29,520 | |
| k. | Net sales | 1,002,500 | |
| l. | Depreciation expense—Buildings | 52,400 | |
| m. | Correction of overstatement of prior year’s sales (pretax) | 16,400 | |
| n. | Gain on sale of discontinued segment’s assets (pretax) | 36,000 | |
| o. | Loss from settlement of lawsuit | 24,150 | |
| p. | Income tax expense | ? | |
| q. | Cost of goods sold | 486,500 |
2a. What is the amount of income from continuing operations before income taxes?
2b. What is the amount of the income tax expense?
2c. What is the amount of income from continuing operations?
2b. What is the amount of the income tax expense?
2c. What is the amount of income from continuing operations?
Transcribed Image Text:What is the amount of income from continuing operations before income taxes?
Income from continuing operations before taxes
What is the amount of the income tax expense?
Income tax expense
What is the amount of income from continuing operations?
Income from continuing operations after taxes
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I tried the following:
Income from continuing Operations before taxes: 330,800
Income Tax Expense: 132,320
Income from continuing operations after taxes: 198,480
None of these answers are correct. Please assist!
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