Memorax Company earned before-tax income of $850,000 for its 2013 fiscal year. D

Question

Memorax Company earned before-tax income of $850,000 for its 2013 fiscal year. During the year the company experienced a $550,000 loss from earthquake damage that it considered to be an extraordinary item. This loss is not included in the $850,000 before-tax income figure. The company

Memorax Company earned before-tax income of $850,000 for its 2013 fiscal year. During the year the company experienced a $550,000 loss from earthquake damage that it considered to be an extraordinary item. This loss is not included in the $850,000 before-tax income figure. The company

Explanation / Answer

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Income before Income Taxes and Extraordinary Item 850000 Income Tax Expense 340000 Income Before Extraordinary Item 510000 Extraordinary Item:
Loss from Earthquake (550000 - .40*550000) -330000 Net Income 180000

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