Income Statement Sections
During the current year, Dale Corporation incurred an extraordinarytornado loss of $330,000 and sold a segment of its business at again of $199,000. Until it was sold, the segment had a currentperiod operating loss of $78,000. Also, the company discovered thatan error caused last year's ending inventory to be understated by$34,000 (a material amount). The company had $830,000 income fromcontinuing operations for the current year. Prepare the lower partof the income statement, beginning with the $830,000 income fromcontinuing operations. Follow tax allocation procedures, assumingthat all changes in income are subject to a 40 percent income taxrate. Disregard earnings per share disclosures.
Income from Continuing Operations $Answer Discontinued Operations Loss from operations of discontinued segment $Answer Gain on disposal of discontinued segment Answer Answer Income before Extraodinary Item Answer Extraordinary Item Tornado Loss Answer Net Income $AnswerIncorrect
0.00 points out of 1.00
Income Statement Sections
During the current year, Dale Corporation incurred an extraordinarytornado loss of $330,000 and sold a segment of its business at again of $199,000. Until it was sold, the segment had a currentperiod operating loss of $78,000. Also, the company discovered thatan error caused last year's ending inventory to be understated by$34,000 (a material amount). The company had $830,000 income fromcontinuing operations for the current year. Prepare the lower partof the income statement, beginning with the $830,000 income fromcontinuing operations. Follow tax allocation procedures, assumingthat all changes in income are subject to a 40 percent income taxrate. Disregard earnings per share disclosures.
| Income from Continuing Operations | $Answer | |
| Discontinued Operations | ||
| Loss from operations of discontinued segment | $Answer | |
| Gain on disposal of discontinued segment | Answer | Answer |
| Income before Extraodinary Item | Answer | |
| Extraordinary Item | ||
| Tornado Loss | Answer | |
| Net Income | $AnswerIncorrect 0.00 points out of 1.00 |
Related questions
Problem 4-7
Wade Corp. has 150,600 shares of common stock outstanding. In2014, the company reports income from continuing operations beforeincome tax of $1,229,200. Additional transactions not considered inthe $1,229,200 are as follows.
| 1. | In 2014, Wade Corp. sold equipment for $36,400. The machine hadoriginally cost $84,100 and had accumulated depreciation of$31,300. The gain or loss is considered ordinary. | |
| 2. | The company discontinued operations of one of its subsidiariesduring the current year at a loss of $190,000 before taxes. Assumethat this transaction meets the criteria for discontinuedoperations. The loss from operations of the discontinued subsidiarywas $90,300 before taxes; the loss from disposal of the subsidiarywas $99,700 before taxes. | |
| 3. | An internal audit discovered that amortization of intangibleassets was understated by $39,700 (net of tax) in a prior period.The amount was charged against retained earnings. | |
| 4. | The company had a gain of $127,100 on the condemnation of muchof its property. The gain is taxed at a total effective rate of40%. Assume that the transaction meets the requirements of anextraordinary item. |
Analyze the above information and prepare an income statement forthe year 2014, starting with income from continuing operationsbefore income tax. Compute earnings per share as it should be shownon the face of the income statement. (Assume a total effective taxrate of 38% on all items, unless otherwise indicated.)(Round earnings per share to 2 decimal places, e.g.1.48.)
Wade Corp. has 150,000 shares of common stock outstanding. In2017, the company reports income from continuing operations beforeincome tax of $1,210,000. Additional transactions not considered inthe $1,210,000 are as follows.
| 1. | In 2017, Wade Corp. sold equipment for $40,000. The machine hadoriginally cost $80,000 and had accumulated depreciation of$30,000. The gain or loss is considered non-recurring. | |
| 2. | The company discontinued operations of one of its subsidiariesduring the current year at a loss of $190,000 before taxes. Assumethat this transaction meets the criteria for discontinuedoperations. The loss from operations of the discontinued subsidiarywas $90,000 before taxes; the loss from disposal of the subsidiarywas $100,000 before taxes. | |
| 3. | An internal audit discovered that amortization of intangibleassets was understated by $35,000 (net of tax) in a prior period.The amount was charged against retained earnings. | |
| 4. | The company had a non-recurring gain of $125,000 on thecondemnation of some of its property (included in the$1,210,000). |
Analyze the above information and prepare an income statement forthe year 2017, starting with income from continuing operationsbefore income tax. Compute earnings per share as it should be shownon the face of the income statement. (Assume a total effective taxrate of 38% on all items, unless otherwise indicated.)(Round earnings per share to 2 decimal places, e.g.1.47.)
