Assume that the Cetnar Corporation\'s chief financial officer gave you the follo
ID: 2366670 • Letter: A
Question
Assume that the Cetnar Corporation's chief financial officer gave you the following information: net sales, $1,900,000; cost of goods sold, $1,050,000; extraordinary gain (net of income taxes of $3,500), $12,500; loss from discontinued operations (net of income tax benefit of $30,000), $50,000; loss on disposal of discontinued operations (net of income tax benefit of $13,000), $35,000; selling expenses, $50,000; administrative expenses, $40,000; income taxes expense on continuing operations, $300,000Explanation / Answer
Cetnar Company Income Statement For the Year Ended June 30, 2010 Net sales $1,900,000 Cost of goods sold 1,050,000 Gross margin $ 850,000 Operating expenses Selling expenses $50,000 Administrative expenses 40,000 Total operating expenses 90,000 Income from continuing operations before income taxes $ 760,000 Income taxes expense 300,000 Income from continuing operations $ 460,000 Discontinued operations Loss from operations of discontinued segment (net of taxes, $30,000) ($50,000) Loss on disposal of segment (net of taxes, $13,000) ( 35,000) ( 85,000) Income before extraordinary items $ 375,000 Extraordinary gain (net of taxes, $3,500) 12,500 $ 387,500 Net incom