Question

Given the following information about a corporation's current year activities, answer the questions below:


Debit Credit
Sales $250,000
Cost of goods sold $90,000
Other operating expenses 54,000
Income from operation of discontinued Division W (net of $9,200 tax) 30,800
Extraordinary loss from hurricane damage (net of $11,000 tax benefit) 37,000
Loss from disposal of Division W (net of $15,000 tax benefit) 45,000
Unusual loss on sale of equipment 12,000
Effect on prior years income of changing depreciation methods (net of $4,000 tax) 13,500

Compute the amounts that should be reported on the income statement as:
(1) Income from continuing operations.
(2) Income before extraordinary items and cumulative effect of changes in accounting principles.
(3) Net income.

Answer

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