For the year ending December 31, 2021, Olivo Corporation had income from continuing operations before taxes of $1,360,000 before considering the following transactions and events. All of the items described below are before taxes and the amounts should be considered material.
Required:
Prepare Olivo’s income statement, beginning with income from
continuing operations before taxes, for the year ended December 31,
2021. Assume an income tax rate of 25%. Ignore EPS disclosures.
(Amounts to be deducted should be indicated with a minus
sign.)
|
OLIVIO CORPORATION | ||
Partial Income Statement | ||
For the Year Ended December 31, 2021 | ||
Income from continuing operations before income taxes* | 1620000 | |
Income tax expense (25% x $1620000) | -405000 | |
Income from continuing operations | 1215000 | |
Discontinued operations: | ||
Loss from operations of discontinued component** | -156000 | |
Income tax benefit (25% x $156000) | 39000 | |
Loss on discontinued operations | -117000 | |
Net income | 1098000 |
*Income from continuing operations before income taxes = $1360000 + ($1520000 - $1260000) = $1360000 + $260000 = $1620000
**Loss from operations of discontinued component = $176000 - $332000 = $-156000
Note: The omission of the adjustment for patent amortization expense of 2019 will be adjusted to the retained earnings in 2021 and not to the income statement.
For the year ending December 31, 2021, Olivo Corporation had income from continuing operations before taxes...
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For the year ending December 31, 2021, Olivo Corporation had income from continuing operations before taxes of $1,300,000 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 2021, 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 2021. The income from operations of the chain from January...
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