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 40% for all items. DebitCredita.Interest revenue $ 14,400b.Depreciation expense—Equipment$ 34,400 c.Loss on sale of equipment26,250 d.Accounts payable 44,400e.Other operating expenses106,800 f.Accumulated depreciation—Equipment 72,000g.Gain from settlement of lawsuit 44,400h.Accumulated depreciation—Buildings 175,300i.Loss from operating a discontinued segment (pretax)18,650 j.Gain on insurance recovery of tornado damage 29,520k.Net sales 1,002,500l.Depreciation expense—Buildings52,400 m.Correction of overstatement of prior year’s sales (pretax)16,400 n.Gain on sale of discontinued segment’s assets (pretax) 36,000o.Loss from settlement of lawsuit24,150 p.Income tax expense? q.Cost of goods sold486,500 4. What is the amount of net income for the year? **Net Income Field Explanation**In the image, there is a text field labeled "Net income." This field is typically used in financial forms or software to input the amount of net income, which is the total earnings after deducting expenses, taxes, and other costs. The field is highlighted in blue on the left side, indicating the label or category, and there is an accompanying blank space on the right side for entering the numerical value of net income.Net income serves as a key indicator of financial health, and understanding how to calculate and record it is crucial for personal budgeting, business accounting, and financial analysis.

1. Net income of the entity can be calculated by way of preparing the income statement. 2. The…

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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 40% for all items.

		Debit	Credit
a.	Interest revenue		$ 14,400
b.	Depreciation expense—Equipment	$ 34,400
c.	Loss on sale of equipment	26,250
d.	Accounts payable		44,400
e.	Other operating expenses	106,800
f.	Accumulated depreciation—Equipment		72,000
g.	Gain from settlement of lawsuit		44,400
h.	Accumulated depreciation—Buildings		175,300
i.	Loss from operating a discontinued segment (pretax)	18,650
j.	Gain on insurance recovery of tornado damage		29,520
k.	Net sales		1,002,500
l.	Depreciation expense—Buildings	52,400
m.	Correction of overstatement of prior year’s sales (pretax)	16,400
n.	Gain on sale of discontinued segment’s assets (pretax)		36,000
o.	Loss from settlement of lawsuit	24,150
p.	Income tax expense	?
q.	Cost of goods sold	486,500

4. What is the amount of net income for the year?

Transcribed Image Text:**Net Income Field Explanation** In the image, there is a text field labeled "Net income." This field is typically used in financial forms or software to input the amount of net income, which is the total earnings after deducting expenses, taxes, and other costs. The field is highlighted in blue on the left side, indicating the label or category, and there is an accompanying blank space on the right side for entering the numerical value of net income. Net income serves as a key indicator of financial health, and understanding how to calculate and record it is crucial for personal budgeting, business accounting, and financial analysis.

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