1) Company Y reported pretax income of $1,000,000, taxes of $400,000 and net income of $600,000. Pretax income included an unusual gain of $60,000 and an unusual expense of $140,000. The normalized tax rate is 40%. Calculate recurring NICO.

2)Yahoo reports that Company X had net income of $400,000 in 2015 including a $300,000 loss from discontinued operations, a $50,000 gain from the settlement of a law suit and an unusual expense of $200,000. The company reported pretax income of $1,050,000 and income tax expense of $350,000. You determine that the normal tax rate for the company should be 40%.

Prepare a reconciliation of net income as reported to recurring NICO beginning with:

Net Income as reported $400,000

3) Company W reported net income of $1,000,000 including a $200,000 gain from discontinued operations. The companys normalized tax rate is 40%. Compute NICO.

4) Company X had pretax income of $1,000,000, income tax expense of $200,000 and net income of $800,000. What was the companys effective tax rate?

4a) If the normal tax rate is 35%, what would recurring NICO be?