Question

Southeast Airlines had pretax earnings of $55 million. Included in this amount is income from discontinued operations of $10 million. The company's tax rate is 25%. What is the amount of income tax expense that Southeast would report in its income statement for continuing operations? (Enter your answer in millions rounded to 2 decimal place (i.e., i.e., 5,500,000 should be entered as 5.50). Amount to be deducted should be indicated with a minus sign.) Income from continuing operations before tax Income tax expense Income from continuing operations Income from discontinued operations Net income

Answer 1

Income from continuing operations before tax	$                        45.00
Income taxes(25%*45 mill)	$                       -11.25
Income from continuing operations	$                        33.75
Income from discontinued operations(net of tax)	$                          7.50
Net Income	$                        41.25