Income Statement Sections During the current year, David Corporation sold a segment of its business at a gain of $210,000. Until it was sold, the segment had a current period operating loss of $75,000. The company had $700,000 income from continuing operations for the current year. Prepare the lower part of the income statement, beginning with the $700,000 income from continuing operations. Follow tax allocation procedures, assuming that all changes in income are subject to a 20 percent income tax rate. Disregard earnings per share disclosures.

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Business

Kaylynn Fritz

19 August, 23:28

Income Statement Sections During the current year, David Corporation sold a segment of its business at a gain of $210,000. Until it was sold, the segment had a current period operating loss of $75,000. The company had $700,000 income from continuing operations for the current year. Prepare the lower part of the income statement, beginning with the $700,000 income from continuing operations. Follow tax allocation procedures, assuming that all changes in income are subject to a 20 percent income tax rate. Disregard earnings per share disclosures.

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Cory Gilmore · Answer 1

Answer is given below.

Explanation:

-Income from Continuing Operation 700000

-Discontinued Operations

-Loss from operations of 60000

discontinued segment (75000*80%)

-Gain on disposal of discontinued 168000 108000

segment (210000*80%)

-Net Income 808000