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QUESTION 22 Henderson Corporation includes in its results for the year ended December 31, 2019 the...

QUESTION 22

  1. Henderson Corporation includes in its results for the year ended December 31, 2019 the following items:

    Gain on Sale of Investments

    $20,000

    Cash

    1,600,000

    Interest Expense

    15,000

    Cost of Goods Sold

    4,500,000

    Selling Expenses

    500,000

    Restructuring Costs

    344,000

    Accounts Payable

    40,000

    Sales

    7,600,000

    Administrative Expenses

    96,000

    Sales Returns

    200,000


    Additional Information:

    1) Henderson’s effective tax rate is 30%.

    2) Henderson sells the assets of a particular division on December 15, 2019 at a price of $500,000. The net book value of the division’s assets at the time of sale is $800,000. The division has before-tax operating income from operations of $75,000 from the beginning of the year through December 15, 2019.

    What is income from continuing operations before income tax?

    A.

    $1,980,000.
    B.

    $1,965,000.
    C.

    $3,400,000.
    D.

    $1,995,000
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