Question

Income Statement Sections
During the current year, Dale Corporation incurred an extraordinary tornado loss of $330,000 and sold a segment of its business at a gain of $199,000. Until it was sold, the segment had a current period operating loss of $78,000. Also, the company discovered that an error caused last year's ending inventory to be understated by $34,000 (a material amount). The company had $830,000 income from continuing operations for the current year. Prepare the lower part of the income statement, beginning with the $830,000 income from continuing operations. Follow tax allocation procedures, assuming that all changes in income are subject to a 40 percent income tax rate. Disregard earnings per share disclosures.

Income from Continuing Operations		$Answer
Discontinued Operations
Loss from operations of discontinued segment	$Answer
Gain on disposal of discontinued segment	Answer	Answer
Income before Extraodinary Item		Answer
Extraordinary Item
Tornado Loss		Answer
Net Income		$AnswerIncorrect 0.00 points out of 1.00

Answer 1

Dale Corporation
Income Statement
	Income From Continuing Operations		$830,000
	Discontinued operations
	Loss from operations of discontinued segment, net of tax (-78000*(1-0.40))	-$46,800
	Gain on disposal of discontinued segment, net of tax (199000*(1-0.40))	$119,400	$72,600
	Income before Extraodinary Item		$902,600
	Extraordinary Item
	Tornado Loss, net of tax (-33000*(1-0.40))		-$19,800
	Net Income		$882,800

Feel free to ask any clarification, if required. Please provide feedback by thumbs up, if satisfied. It will be highly appreciated. Thank you.