Income Statement Sections

During the current year, Dale Corporation incurred an extraordinary tornado loss of $350,000 and sold a segment of its business at a gain of $201,000. Until it was sold, the segment had a current period operating loss of $80,000. Also, the company discovered that an error caused last year's ending inventory to be understated by $36,000 (a material amount). The company had $850,000 income from continuing operations for the current year. Prepare the lower part of the income statement, beginning with the $850,000 income from continuing operations. Follow tax allocation procedures, assuming that all changes in income are subject to a 40 percent income tax rate. Disregard earnings per share disclosures.

Income from Continuing Operations

Discontinued Operations Loss from operations of discontinued segment

Gain on disposal of discontinued segment

Income before Extraodinary Item

Extraordinary Item Tornado Loss

Net Income