Southeast Airlines had pretax earnings of $60 million, including a gain on dispo

Question

Southeast Airlines had pretax earnings of $60 million, including a gain on disposal of a discontinued operation of $10 million. The company’s tax rate is 40%. What is the amount of income tax expense that Southeast should report in its income statement? Comment Expert Answer yogeshb76 yogeshb76 answered this 44 minutes later Was this answer helpful? 0 0 2,302 answers Amount of income tax expense to be reported in income statement = ( 60 million - 10 million ) *0.40 i.e 20 million 10 million will be treated as an extraordinary item Hide comments (1) Comments Anonymous posted 11 hours ago Edit Delete So income from ordinary operations is 20 million?

Explanation / Answer

Amount of Income tax expense:

$ Pretax earnings 60 million + Gain on disposal of discontinued operation 10 million Total taxable income 70 million Income tax rate 40% Income tax expense 28 million

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