Answer:
What amount should be reported in the company's income statement as income from continuing operations?
$54000
Explanation:
revenue 600000
Operating expenses -420000
Interest expense -20000
gain on sale of investments 30000
restructuirng cost -100000
Income 90000
Tax rate 40%
tax expense 36000
Net income 54000
Answer:
The amount that should be reported in the company's income statement as income from continuing operations is $54,000
Explanation:
ACCOUNT DEBIT CREDIT
Debit Credit Revenues 600,000
Operating Expenses 420,000
Income of Discontinued Operations 200,000
Restructuring Cost 100,000
Interest Expense 20,000
Gain on Sale of Investment 30,000
Income Tax Expense 36,000
TOTAL $576,000 $830,000
NOTE
Taxable Income 830,000 – 200,000 - 540,000 =90,000
Income tax Expense =90,000*0.4 = $36,000 (the company income tax rate is 40%)
The $200, 000 was subtracted from the total income of $830,000 before the income tax expense was calculated since it was income earned from discontinued operation.
Total Income = 830, 000 – 576,000 = $254,000
Income from Continuing Operations = 254,000 – 200,000 (Income from discontinued operations) = $54,000
Therefore the amount that should be reported in the company's income statement as income from continuing operations is $54,000
