Problem 17 6AA Income statement computations Selected account balances from the adjusted trial balance for Olinda Corporation as of its calendar year end December 31 follow Debit Credit a Interest revenue $ 14,300 b Depreciation expenseEquipment $ 34,300 c Loss on sale of equipment 26,150 d Accounts payable 44,300 e Other operating expenses 106,700 f Accumulated depreciationEquipment 71,900 g Gain from settlement of lawsuit 44,300 h Accumulated depreciationBuildings 175,100 i Loss from operating a discontinued segment (pretax) 18,550 j Gain on insurance recovery of tornado damage 29,420 k Net sales 1,001,500 l Depreciation expenseBuildings 52,300 m Correction of overstatement of prior years sales (pretax) 16,300 n Gain on sale of discontinued segments assets (pretax) 35,500 o Loss from settlement of lawsuit 24,050 p Income tax expense q Cost of goods sold 485,500 Assume that the companys income tax rate is 30 for all items Compute the tax effects and after tax amounts of the three items labeled pretax 2a What is the amount of income from continuing operations before income taxes 2b What is the amount of the income tax expense 2c What is the amount of income from continuing operations

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Jul 01, 2024

Problem 17-6AA Income statement computations Selected account balances from the adjusted trial balance for Olinda Corporation as of its calendar year-end December 31 follow. Debit

Problem 17-6AA Income statement computations

Selected account balances from the adjusted trial balance for Olinda Corporation as of its calendar year-end December 31 follow.

		Debit		Credit
a.	Interest revenue			$	14,300
b.	Depreciation expenseEquipment	$	34,300
c.	Loss on sale of equipment		26,150
d.	Accounts payable				44,300
e.	Other operating expenses		106,700
f.	Accumulated depreciationEquipment				71,900
g.	Gain from settlement of lawsuit				44,300
h.	Accumulated depreciationBuildings				175,100
i.	Loss from operating a discontinued segment (pretax)		18,550
j.	Gain on insurance recovery of tornado damage				29,420
k.	Net sales				1,001,500
l.	Depreciation expenseBuildings		52,300
m.	Correction of overstatement of prior years sales (pretax)		16,300
n.	Gain on sale of discontinued segments assets (pretax)				35,500
o.	Loss from settlement of lawsuit		24,050
p.	Income tax expense		?
q.	Cost of goods sold		485,500

Assume that the companys income tax rate is 30% for all items. Compute the tax effects and after-tax amounts of the three items labeled pretax.

2a. What is the amount of income from continuing operations before income taxes? 2b. What is the amount of the income tax expense? 2c. What is the amount of income from continuing operations?