Richmond Inc. reported income from operations during 2019 of
$750,000. Additional transactions occurring in 2019 but not
considered in the $750,000 are as follows:
- The corporation experiences an uninsured loss due to government
determination of possible contamination in the amount of $55,000
before taxes during the year. The company had never experienced a
similar situation in its history.
- The corporation decided to change from the weighted average
method of inventory to the First-In First-Out method. The effect of
this change on prior years is an increase in income before taxes of
$35,000. The First-in First-out method has been used for 2019.
- Investments sold resulted in a loss of $92,800 before
taxes.
- Available-for-Sale Debt Securities experienced an unrealized
holding gain of $32,000 before taxes during 2019.
- The board of directors voted on January 1, 2019, to dispose of
a segment of its business. On that date the book value of the
segment was $1,400,000. The corporation was committed to the plan
to sell and was actively looking for a buyer. The segment was sold
on November 30, 2019 for $1,180,000. The segment generated an
income of $375,000 from operations from January 1, 2019 to the
disposal date. The disposal of the segment is viewed as a strategic
shift that will have a major effect on the operations and the
financial results of the corporation.
- Retained Earnings had a balance of $80,000 at January 1,
2019.
- The income tax rate for 2019 is 30%.
Calculate the income from continuing operations that should be
reported in the income statement for the year ended December 31,
2019. Please use the following format for your answer
$XXX,XXX.XX