Canton Corporation reported the following items in its adjusted trial balance fo

Question

Canton Corporation reported the following items in its adjusted trial balance for the year ended December 31, 2018: Income from continuing operations before income taxes Gain on disposal of discontinued component Loss from operations of discontinued component $113,000 30,700 (53,000) Canton is subject to a 30% tax rate. Required: Prepare the December 31, 2018, income statement for Canton Corporation, starting with income from continuing operations before income taxes. (Amounts to be deducted should be indicated with a minus sign.) CANTON CORPORATION Partial Income Statement For the Year Ended December 31, 2018 ncome from continuing operations before income taxes Income tax expense $113,000 33,900 $146,900 ncome from continuing operations Discontinued operations: $21,490 Income from operations of discontinued component Loss from operations of discontinued component 21,490 $168,390 et income

Explanation / Answer

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Canton Corporation Partial Income Statement For the Year Ended December 31, 2018 Income from continuing operations before income taxes $113,000 Income tax expense ($113,000 x 30%) 33,900 Income from continuing operations 79,100 Discontinued operations: Loss from operations of discontinued component ($53000 - $30700) ($22,300) Income tax benefit ($22,300 x 30%) $6,690 Loss on discontinued operations -15,610 Net income $210,390

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