Question

Faisal Corporation has the following information about 2020 (all numbers are given pre-tax): Recorded a $16,000...

  1. Faisal Corporation has the following information about 2020 (all numbers are given pre-tax):

    • Recorded a $16,000 loss on the sale of a work truck
    • Sales revenue for continuing operations was $140,000
    • Operating expenses for continuing operations was $61,000
    • A fire burned the office building resulting in an uninsured loss of $40,000
    • Sold a discontinued component of the business for a gain of $34,000
    • The discontinued component reported an operating loss of $17,000 prior to being sold
    • Stock investments were sold for a realized gain of $3,000
    • Unrealized losses on available-for-sale debt securities were $5,000

    Which of the following statements is true? Assume a 25% tax rate.

    Income from continuing operations (pre-tax) is $82,000.

    None of the other answer choices is correct.

    Income tax expense is $10,750.

    Net income from continuing operations is $19,500.

    Net income is $28,500.

    Net income is $38,000.

    Net income from continuing operations is $17,250.

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