Question

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

Answer 1