1. Income Statement Presentation

Whaler Corporation reported income from continuing operations of $248,000 at December 31, 2018 before taxes. Excluded from that calculation were the following items:

• On October 15^th, the company disposed of the Engine Division which had the following account balance at the end of the year.

Sales	158,000
Cost of goods sold	73,000
Operating expenses	53,000
Realized gain on asset sales	22,000

It is anticipated that the remaining assets will be sold at a $5,000 gain

• The company had realized security losses of $8,000 during the year.
• The Inventory at December 31, 2017 was overstated by $28,000.
• The company went through a restructuring during the period at a cost of $59.000.
• The marketing director passed away during the period and the company received a $100,000 check from the life insurance company. The cash surrender value was $73,000. The gain is not taxable.

Part A. Compute the correct income from continuing operations.

Reported income from continuing operations before tax	248000
Effect of disposal of Engine division
Effect of Security gains and losses
Effect of Inventory Error
Effect of Restructuring
Effect of Death of Marketing Director
Correct Income from continuing operations before tax

Part B. Assume your correct income from continuing operations before tax was $178,000. Then using the $178,000, prepare a partial income statement beginning with Income from continuing operations before tax. The company is in the 20% tax bracket.