Problem 17-6AA Income statement computations and format LO A2 The following info
ID: 2561849 • Letter: P
Question
Problem 17-6AA Income statement computations and format LO A2 The following information applies to the questions displayed below Selected account balances from the adjusted trial balance for Olinda Corporation as of its calendar year end December 31, 2013, follow. a. Interest revenue b. Depreclation expense-Equipment c. Loss on sale of equipment d. Accounts payable e. Other operating expenses f. Accumulated depreciation-Equlpment g. Gain from settlement of lawsult h. Accumulated depreciation-Buildings l Loss from operating a discontinued segment (pretax) $14,800 $ 34,800 26,650 44,800 107,200 72,400 44,800 176,100 19,050 Gain on insurance recovery of tornado damage (pretax and extraordinary 29,920 1,006,500 k. Net sales . Depreclation expense -Buildings m. Correction of overstatement of prior year's sales (pretax) n. Galn on sale of discontinued segment's assets (pretax) . Loss from settlement of lawsuit D. Incone taxes expense d. Cost of goods sold 52,800 16,800 2455038.000 490,500 References Section Break Pidblam 17-6AA Iincome stetermenl ans aExplanation / Answer
ans 1 Pre tax 30% tax After tax Pretax Loss from operating a discontinued segment -19,050 -5,715 -13,335 Gain on insurance recovery of tornado damage 29,920 8,976 20,944 Correction of overstatement of prior year’s sales -16,800 -5,040 -11,760 Gain on sale of discontinued segment’s assets 38,000 11,400 26,600 ans 2 Net sales 1,006,500 Interest revenue 14,800 Gain from settlement lawsuit 44,800 1,066,100 Less: Cost of goods sold 490,500 Depreciation expense—Equipment. 34,800 Other operating expenses 107,200 Depreciation expense—Buildings 52,800 Loss on sale of Equipment 26,650 Loss from settlement lawsuit 24,550 Total expenses 736,500 Income from continuing operations before taxes 329,600 ans Ans 2.2 Income tax expenses (329600*30%) 98880 ans 2.3 Income from continuing operations before taxes 329,600 Income tax expenses (329600*30%) -98880 Income from continuing operations after taxes 230,720 Ana 3 After tax income from discontinued segment 13265 (-13335+26600) ans 4 Income before extraordinary item 243985 230720+13265 ans 5 Income before extraordinary item 243985 Gain on insurance recovery of tornado damage 20,944 Net Income 264929