During the current year, Dale Corporation sold a segment of its business at a ga

Question

During the current year, Dale 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 $850,000 income from continuing operations for the current year. Prepare the lower part of the income statement, beginning with the $850,000 income from continuing operations. Follow tax allocation procedures, assuming that all changes in income are subject to a 35 percent income tax rate. Disregard earnings per share disclosures.

Explanation / Answer

DALE CORPORATION

INCOME STATEMENT

Income from continuing operations $850,000 Less: Income taxes (35%) (297,500) Income after income tax 552,500 Add: Net Income from discontinued operations (210,000 - 75,000) 135,000 Net Income 687,500

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