Selected account balances from the adjusted trial balance for Harbor Corp. as of its calendar year end December 31, 2015, follow.

Required
Answer each of the following questions by providing supporting computations.
1. Assume that the company's income tax rate is 25% for all items. Identify the tax effects and after tax amounts of the four items labeled pretax.
2. What is the amount of income from continuing operations before income taxes? What is the amount of income taxes expense? What is the amount of income from continuing operations?
3. What is the total amount of after-tax income (loss) associated with the discontinued segment?
4. What is the amount of income (loss) before the extraordinary items?
5. What is the amount of net income for the year?

Transcribed Image Text:

Debit Credit $ 400,000 2,640,000 a. Accumulated depreclation-Buildings b. Interest revenue c. Net sales d. Income taxes expense e. Loss on hurricane damage (pretax f. Accumulated depreclation-Equipment g. Other operating expenses. h. Depreclation e I. Loss from settlement of lawsult l. Galn from settlement of lawsult k. Loss on sale of equipment I. Loss from operating a discontinued segment (pretax) m. Depreclation expense -Buildings n. Correction of overstatement of prior year's expense (pretax) o. Cost of goods sold . Loss on sale of discontinued segment's assets (pretax) q. Accounts payable 20,000 and extraordinary) 64,000 220,000 328,000 00,000 36,000 68,000 24,000 20,000 156,000 48,000 1,040,000 180,000 32,000