Selected account balances from the adjusted trial balance for Olinda Corporation as of its calendar year-end December 31 follow. Assume that the company’s income tax rate is 30% for all items. DebitCredita.Interest revenue $ 14,600b.Depreciation expense—Equipment$ 34,600 c.Loss on sale of equipment26,450 d.Accounts payable 44,600e.Other operating expenses107,000 f.Accumulated depreciation—Equipment 72,200g.Gain from settlement of lawsuit 44,600h.Accumulated depreciation—Buildings 175,700i.Loss from operating a discontinued segment (pretax)18,850 j.Gain on insurance recovery of tornado damage 29,720k.Net sales 1,004,500l.Depreciation expense—Buildings52,600 m.Correction of overstatement of prior year’s sales (pretax)16,600 n.Gain on sale of discontinued segment’s assets (pretax) 37,000o.Loss from settlement of lawsuit24,350 p.Income tax expense? q.Cost of goods sold488,500 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 income statement is one of the important components of financial statements. It records all the expenses and income the company incurred during the financial year and computes the net profit or loss. When total revenue is higher than expenses, there is a net profit; conversely, when revenue is lower than expenses, there is a net loss.Final answer: 2a) $330,200 2b) $99,060 2c) $231,140.

Answered: 2a. What is the amount of income from…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Selected account balances from the adjusted trial balance for Olinda Corporation as of its calendar year-end December 31 follow. Assume that the company’s income tax rate is 30% for all items.

		Debit	Credit
a.	Interest revenue		$ 14,600
b.	Depreciation expense—Equipment	$ 34,600
c.	Loss on sale of equipment	26,450
d.	Accounts payable		44,600
e.	Other operating expenses	107,000
f.	Accumulated depreciation—Equipment		72,200
g.	Gain from settlement of lawsuit		44,600
h.	Accumulated depreciation—Buildings		175,700
i.	Loss from operating a discontinued segment (pretax)	18,850
j.	Gain on insurance recovery of tornado damage		29,720
k.	Net sales		1,004,500
l.	Depreciation expense—Buildings	52,600
m.	Correction of overstatement of prior year’s sales (pretax)	16,600
n.	Gain on sale of discontinued segment’s assets (pretax)		37,000
o.	Loss from settlement of lawsuit	24,350
p.	Income tax expense	?
q.	Cost of goods sold	488,500

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?

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