Income Statement Sections During the current year, Dale Corporation incurred an

Question

Income Statement Sections
During the current year, Dale Corporation incurred an extraordinary tornado loss of $330,000 and sold a segment of its business at a gain of $199,000. Until it was sold, the segment had a current period operating loss of $78,000. Also, the company discovered that an error caused last year's ending inventory to be understated by $34,000 (a material amount). The company had $830,000 income from continuing operations for the current year. Prepare the lower part of the income statement, beginning with the $830,000 income from continuing operations. Follow tax allocation procedures, assuming that all changes in income are subject to a 40 percent income tax rate. Disregard earnings per share disclosures.

Income from Continuing Operations $Answer Discontinued Operations Loss from operations of discontinued segment $Answer Gain on disposal of discontinued segment Answer Answer Income before Extraodinary Item Answer Extraordinary Item Tornado Loss Answer Net Income $AnswerIncorrect
0.00 points out of 1.00

Explanation / Answer

Income from Continuing Operations 830000 Less Tax 332000 Income from Continuing Operations (After Tax) 498000 Discontinued Operations Loss from operations of discontinued segment (net of tax) 78000(1-0.40) -46800 Gain on disposal of discontinued segment net of tax (199000*(1-0.40) 119400 72600 Income before Extraodinary Item 570600 Extraordinary Item Tornado Loss (330000(1-0.40)) 198000 -198000 Net Income 372600

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