During the current year, Newtech Corporation sold a segment of its business at a loss of $230,000. Until it was sold, the segment had a current period operating loss of $200,000. Also, the company had an extraordinary gain of $90,000 during the year as the result of an expropriation settlement received from a foreign government. The company has $800,000 income from continuing operations for the current year. Prepare the lower part of the income statement, beginning with the $800,000 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 $ (120,000) * Loss on disposal of discontinued segment Income before Extraodinary Item Extraordinary Item Gain on expropriation settlement Net Income. (138,000) X S 480,000 X x 370,000 X 54,000 800,000 X

During the current year, Newtech Corporation sold a segment of its business at a loss of $230,000. Until it was sold, the segment had a current period operating loss of $200,000. Also, the company had an extraordinary gain of $90,000 during the year as the result of an expropriation settlement received from a foreign government. The company has $800,000 income from continuing operations for the current year. Prepare the lower part of the income statement, beginning with the $800,000 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 $ (120,000) * Loss on disposal of discontinued segment Income before Extraodinary Item Extraordinary Item Gain on expropriation settlement Net Income. (138,000) X S 480,000 X x 370,000 X 54,000 800,000 X

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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