For its fiscal year ending October 31, 2008, Molini Corporation reports the foll

Question

For its fiscal year ending October 31, 2008, Molini Corporation reports the following partial data.

Income before income taxes $540,000
Income tax expense (30% $390,000)

117,000
Income before extraordinary items 423,000
Extraordinary loss from flood

150,000
Net income

$273,000

The flood loss is considered an extraordinary item. The income tax rate is 30% on all items.

Prepare a correct income statement, beginning with income before income taxes. (Enter all amounts as positive amounts and subtract where necessary.)

MOLINI CORPORATION
Partial Income Statement

For the Year Ended October 31, 2008
$


Income before extraordinary item


Net income

$

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Explanation / Answer

MOLINI CORPORATION
Partial Income Statement

For the Year Ended October 31, 2008

Income from Continuing Ops prior Income Taxes    $540,000.00
Income Tax Expense $162,000.00
Income Prior To Extraordinary Item $378,000.00
Extraordinary Loss    $150,000.00
Tax Effect    $ 45,000.00 $105,000.00
Net Income    $273,000.00

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