Selected account balances from the adjusted trial balance for Ollnda Corporation
ID: 2419112 • Letter: S
Question
Selected account balances from the adjusted trial balance for Ollnda Corporation as of its calendar year end December 31. 2015. follow. What is the amount of income from continuing operations before income taxes? What is the amount of the income taxes expense? What is the amount of income from continuing operations? What is the total amount of after-tax income (loss) associated with the discontinued segment? What is the amount of income (loss) before the extraordinary items? What is the amount of net income for the year?Explanation / Answer
2.2) Income tax expenses: A liability owing to federal, state/provincial and municipal governments. Tax expenses are calculated by multiplying the appropriate tax rate of an individual or business by their income before taxes, after factoring in such variables as non-deductible items, tax assets and tax liabilities.
Tax expense is the amount of tax owed in a given period. It appears on the income statement
Tax Expense = Effective Tax Rate x Taxable Income
Here, iam assuming 40% is the tax rate
Tax expenses = 232,850 *40% = $ 93,140
2.3) Amount of income from continuous operations after taxes are = $232,850 – 93,140 = 139,710
3) Total income of after tax associated with discontinuous segment = 13,050.
4) Income before extra ordinary income = 139.710
5) Net income = 108,288
Notes:
Sales
1,013,500
Less:
Cost of goods sold
-497,500
Operating expenses
-107,900
Admin expenses ( bal fig.)
-175,250
Income from operations before tax ( given)
232,850
Less: income tax assumed 40%
-93,140
Income from operations after tax
139,710
Less: Income from operations from discontinuous gains (after tax = 41,500 -19750 =21750 – 40%)
-13,050
Less: extra ordinary gain =30620-40%
-18,372
Net income
108,288
Sales
1,013,500
Less:
Cost of goods sold
-497,500
Operating expenses
-107,900
Admin expenses ( bal fig.)
-175,250
Income from operations before tax ( given)
232,850
Less: income tax assumed 40%
-93,140
Income from operations after tax
139,710
Less: Income from operations from discontinuous gains (after tax = 41,500 -19750 =21750 – 40%)
-13,050
Less: extra ordinary gain =30620-40%
-18,372
Net income
108,288
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