Question

sales revenue	610,000
COGS	270,000
Selling and Admin	50,000
Dividends declared paid	10,000
unrealized gain	15,000
Loss on discontinued operation	20,000
Gain on sale of equip	4,000

All amounts are before tax, assume 20% tax. what is the amount of net income reported?

-231,200

-211,200

-219,200

-235,200

Answer 1

Income Statement
Sales revenue		610,000
Cost of goods sold		-270,000
Gross profit		340,000
Operating expenses:
Selling and administrative expenses	-50,000
Total Operating expenses		-50,000
Operating Profit		290,000
Other revenues:
Gain on sale of equip		4,000
Profit before tax		294,000
Income tax expense		-58,800
Net Income from continuing operations		235,200
Discontinued operations:
Loss on discontinued operations, net of tax (20,000- 20,000 x 20%)		-16,000
Net Income		219,200

The amount of net income reported = 219,200

Third option is correct.