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too FACTS: Vanpop Inc. reported income from continuing operations before taxes during 2074 of $430,000. Additional transactions occuring during 2014, but not included in the $430,000 are as follows: 7481000 1. At the beginning of 2012, the corporation purchased equipment for $74,000 (salvage value of $14.000) that had a usefu life of 6 years. The bookkeeper used straight-line depreciation for 2012, 2013 and 2074 but incorrectly used a 10-year useful life in determining the deprecation amount - Above the ine-Suche 1960, 6000 2. A severe storm with torrential rains destroyed an onsite warehouse due to flooding. This resulted in an unusual protr ready loss of S15,000. Above the line 3. Vanpop disposed of its consumer division during 2074. The division generated a $155,000 pre-tax loss on operations during the year but provided a $230,000 pre-tax gain on disposal. Assume that this transaction meets the criteria for discontinued operations The corporation decided to change its cost flow method of inventory from average cost to the FIFO method. The effect of be thelu -after tax 4. this change on prior years is to increase 2012 income by $86,000 and increase 2073 income by $65,000 before taxes, The FIFO method was used for 2014. no effect - Correst method useal REQUIREMENT 1: Determine which of the transactions above would require an above the line adjustment on Vanpop's 2074 Income Statement and show the calculation to determine adjusted Income from Continuing Operations Before Tax As reported 480,000 sep esp adj (2424) (4000) Loss 411,00 REQUIREMENT 2: Prepare a partial income statement for 20Y4 starting with income from Continuing Operations Before Tax adjusted for any above the line changes (Hint: You calculated this in Requirement 1). Assume a tax rate of 30% 411,000 Example: At the in before-tax inco component of the the sale of its ass stock outstanding issued $5,000 of 204 1 income stat Net Sales Reves Cis000) Cost of Goods S. Gross Profit Othe