Income Statement Sections During the current year Dale Corpo

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

Solution

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