Chris Incorporated has accumulated the following information for its second-quarter income statement for 20X2: Sales Cost of goods sold Operating expenses Additional Information $ 864,000 434,000 244,000 1. First-quarter income before taxes was $114,000, and the estimated effective annual tax rate was 40 percent. At the end of the second quarter, expected annual income is $620,000, and a dividend exclusion of $32,000 and a business tax credit of $15,000 are anticipated. The combined state and federal tax rate is 50 percent. 2. The $434,000 cost of goods sold is determined by using the LIFO method and includes 7,500 units from the base layer at a cost of $12 per unit. However, you have determined that these units are expected to be replaced at a cost of $26 per unit. 3. The operating expenses of $244,000 include a $74,000 factory rearrangement cost incurred in April. You have determined that the second quarter will receive about 25 percent of the benefits from this project with the remainder benefiting the third and fourth quarters. Required: a. Calculate the effective annual tax rate expected at the end of the second quarter for Chris Incorporated. b. Prepare the income statement for the second quarter of 20X2. Your solution should include a computation of income tax (or benefit): Complete this question by entering your answers in the tabs below. Req A Req B1 Req B2 Calculate the effective annual tax rate expected at the end of the second quarter for Chris Incorporated. Estimated effective annual tax rate % $12 per unit. However, you have determined that these units are exp 3. The operating expenses of $244,000 include a $74,000 factory rea second quarter will receive about 25 percent of the benefits from th quarters. Required: a. Calculate the effective annual tax rate expected at the end of the sec b. Prepare the income statement for the second quarter of 20X2. Your benefit): Complete this question by entering your answers in the tabs below Req A Req B1 Req B2 Prepare the income statement for the second quarter of 20X2. CHRIS, INCORPORATED Income Statement For Three Months Ended June 30, 20X2 Req A Req B2 The $434,000 cost of goods sold is determined by using the LIFO method and includes 7,500 $12 per unit. However, you have determined that these units are expected to be replaced at a The operating expenses of $244,000 include a $74,000 factory rearrangement cost incurred i second quarter will receive about 25 percent of the benefits from this project with the remaind quarters. quired: Calculate the effective annual tax rate expected at the end of the second quarter for Chris Inca Prepare the income statement for the second quarter of 20X2. Your solution should include a c benefit): Complete this question by entering your answers in the tabs below. Req A Req B1 Req B2 our solution should include a computation of income tax (or benefit): Income (Loss) Before Taxes Estimated Tax (Benefit) Interim Period Effective Annual Tax Current Period Year to Date Year to Date Rate Less Previously Provided Reported in this Period 1 % 2 % < Req B1 Req B2 >