An inexperienced accountant for Fielder Corporation showed the following in Fiel
ID: 2488435 • Letter: A
Question
An inexperienced accountant for Fielder Corporation showed the following in Fielder’s 2014 income statement: Income before income taxes $438,100; Income tax expense $73,800; Extraordinary loss from flood (before taxes) $90,200; and Net income $168,200. The extraordinary loss and taxable income are both subject to a 29% tax rate.
Prepare a corrected income statement beginning with “Income before income taxes.”
FIELDER CORPORATION
Income Statement (Partial)
Income before Income Taxes
FIELDER CORPORATION
Income Statement (Partial)
Income before Income Taxes
$DividendsExpensesNet Income / (Loss)Retained EarningsRevenueTotal ExpensesTotal RevenuesIncome Tax ExpenseIncome before Extraordinary ItemExtraordinary Loss from Flood
DividendsExpensesNet Income / (Loss)Retained EarningsRevenueTotal ExpensesTotal RevenuesIncome Tax ExpenseIncome before Extraordinary ItemExtraordinary Loss from Flood
DividendsExpensesNet Income / (Loss)Retained EarningsRevenueTotal ExpensesTotal RevenuesIncome Tax ExpenseIncome before Extraordinary ItemExtraordinary Loss from Flood
DividendsExpensesNet Income / (Loss)Retained EarningsRevenueTotal ExpensesTotal RevenuesIncome Tax ExpenseIncome before Extraordinary ItemExtraordinary Loss from Flood
$Explanation / Answer
FIELDER CORPORATION
Income Statement (Partial)
Income before income taxes
$438,100
Income tax expense (29% x $438,100)
$127,049
Income before extraordinary item =
$311,051
Extra ordinary loss from flood, net of
($90,200 x 29%) tax savings
(26,158)
Net Income
$284,893
FIELDER CORPORATION
Income Statement (Partial)
Income before income taxes
$438,100
Income tax expense (29% x $438,100)
$127,049
Income before extraordinary item =
$311,051
Extra ordinary loss from flood, net of
($90,200 x 29%) tax savings
(26,158)
Net Income
$284,893