Home Inc. reported the following for 2020:

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Question

Net sales .......................................................................................... $ 1,500,000

Cost of goods sold ......................................................................... 750,000

Selling and admin expenses ........................................................ 310,000

Loss on disposal of equipment ..................................................... 50,000

Unrealized gain (OCI) on FV-OCI investment (net of tax of $6,000) 14,000

Loss on disposal of discontinued division (net of tax of $9,000) 21,000

Home Inc.’s income tax rate is 30%.

On Home Inc.’s multiple-step income statement for 2020, Net Income is

Select one:
a.
$243,000
b.
$360,000
c.
$252,000
d.
$369,000
Clear my choice

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Answer 1

Answer #1

Multiple step income statement

Sales revenue	1,500,000
Cost of goods sold	- 750,000
Gross profit	750,000
Operating expenses:
Selling and admin expenses	- 310,000
Operating profit	440,000
Other expenses and losses:
Loss on disposal of equipment	- 50,000
Income before income tax	390,000
Income tax expense (390,000 x 30%)	- 117,000
Income from continued operations	273,000
Discontinued operations:
Loss on disposal of discontinued operations, (net of tax of $9,000)	- 21,000
Net income	252,000

On Home Inc.’s multiple-step income statement for 2020, Net Income is $252,000

Correct option is (c)