Question

Problem 17-6AA Income statement computations


Selected account balances from the adjusted trial balance for Olinda Corporation as of its calendar year-end December 31 follow.


Debit Credit

a. Interest revenue $ 14,300

b. Depreciation expense—Equipment $ 34,300

c. Loss on sale of equipment 26,150

d. Accounts payable 44,300

e. Other operating expenses 106,700

f. Accumulated depreciation—Equipment 71,900

g. Gain from settlement of lawsuit 44,300

h. Accumulated depreciation—Buildings 175,100

i. Loss from operating a discontinued segment (pretax) 18,550

j. Gain on insurance recovery of tornado damage 29,420

k. Net sales 1,001,500

l. Depreciation expense—Buildings 52,300

m. Correction of overstatement of prior year’s sales (pretax) 16,300

n. Gain on sale of discontinued segment’s assets (pretax) 35,500

o. Loss from settlement of lawsuit 24,050

p. Income tax expense ?

q. Cost of goods sold 485,500

Assume that the company’s income tax rate is 30% for all items. Compute the tax effects and after-tax amounts of the three items labeled pretax.


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?

Note: Income from continuing operations before taxes ≠ 331,100 I tried that and its wrong

al Verizon 41% 1:58 p. m. Problem 17-6A A Income statement computations Selected account balances from the adjusted trial balance for Old Corporation as of its calendar year end December 3 follow que of equipment Accounts Acumulated Gain from Acced 175.100 Depreca 52300 m Huilings Comestion of ovement of prior year's discontinued cilement of Cost of goods Assume that the company income tax all items the tax effects and of the them eled preta for amount What is the m ten!

Answer 1

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Olinda Corporation
Income Statement	Amount $
Net Sales	1,001,500.00
Total Revenue	1,001,500.00
Cost of Goods Sold	485,500.00
Gross profit	516,000.00
Other Operating Expenses	106,700.00
Depreciation expense- Equipment	34,300.00
Depreciation expense- Buildings	52,300.00
Total expense from continuing operations	193,300.00
Income from continuing operations, before tax	322,700.00	Answer 2a
Income Tax @30%	96,810.00	Answer 2b
Income from continuing operations	225,890.00	Answer 2c