Question
The income statement of Jones Company for the year ended December 31, 2012, follows. Revenue from Sales $ 790,000 Cost of Products Sold 410,000 Gross
The income statement of Jones Company for the year ended December 31, 2012, follows.
Revenue from Sales $ 790,000
Cost of Products Sold 410,000
Gross Profit 380,000
Operating Expenses:
Selling Expenses $ 40,000
General Expenses 80,000 120,000
Operating Income 260,000
Equity in Earnings of Nonconsolidated Subsidiaries (loss) (20,000)
Operating Income Before Income Taxes 240,000
Taxes Related to Operations (94,000)
Net Income from Operations 146,000
Discontinued Operations:
Loss from Operations of Discontinued Segment (less
applicable income tax credit of $ 30,000) $ (70,000)
Loss on Disposal of Segment (less applicable
income tax credit of $ 50,000) (100,000) (170,000)
Income Before Cumulative Effect of Change in
accounting principle (24,000)
Cumulative Effect of Change in Accounting Principle
(less applicable income taxes of $ 25,000) 50,000
Net Income $ 26,000
Compute the net earnings remaining after removing nonrecurring items.
Determine the earnings (loss) from the nonconsolidated subsidiary.
Determine the total tax amount.
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