Question

Presented below is information related to Great Company at December 31, 2018.  

Sales revenue	800,000
Selling and administrative expenses	200,000
Loss on sale of plant assets	60,000
Interest expense	15,000
Cost of goods sold	420,000
Loss on discontinued operations (after-tax)	40,000
Allocation to noncontrolling interest	20,000

Enter the following information in the blank fields in the same order as it appears below. Ignore income tax.
1. Gross profit

2. Income from operations

3. Income from continuing operations

4. Net income

Answer 1

1. $380,000

1	Sales		$ 800,000
	Cost of goods sold		$ 420,000
	Gross profit		$ 380,000

2. $180,000

2	Gross profit		$ 380,000
	Selling expenses and administrative expense		$ 200,000
	Income from operations		$ 180,000

3. $105,000

3	Income from operations		$ 180,000
	Other income (expese):
	Interest expense	($ 15,000)
	Loss on sale of plant assets	($ 60,000)	($ 75,000)
	Income from continuing operations		$ 105,000

4. $65,000

4	Income from continuing operations		$ 105,000
	Loss on discontinued operations (After tax)		($ 40,000)
	Net income		$ 65,000