Answered step by step
Verified Expert Solution
Question
1 Approved Answer
For the year ending December 31, 2021, Olivo Corporation had income from continuing operations before taxes of $1,310,000 before considering the following transactions and events.
For the year ending December 31, 2021, Olivo Corporation had income from continuing operations before taxes of $1,310,000 before considering the following transactions and events. All of the items described below are before taxes and the amounts should be considered material.
- In November 2021, Olivo sold its PizzaPasta restaurant chain that qualified as a component of an entity. The company had adopted a plan to sell the chain in May 2021. The income from operations of the chain from January 1, 2021, through November was $171,000 and the loss on sale of the chains assets was $322,000.
- In 2021, Olivo sold one of its six factories for $1,420,000. At the time of the sale, the factory had a book value of $1,210,000. The factory was not considered a component of the entity.
- In 2019, Olivos accountant omitted the annual adjustment for patent amortization expense of $131,000. The error was not discovered until December 2021.
Required: Prepare Olivos income statement, beginning with income from continuing operations before taxes, for the year ended December 31, 2021. Assume an income tax rate of 25%. Ignore EPS disclosures. (Amounts to be deducted should be indicated with a minus sign.)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started