Asked by Isabel Sanchez on Jul 09, 2024
Verified
Venti Corporation had income from continuing operations of $420000 for the year ended December 31 2017. It also had the following item (before income taxes):
1. Loss of $50000 on discontinuance of a division.
All items are subject to income taxes at a 25% tax rate.
Instructions
Prepare a partial income statement beginning with income from continuing operations.
Income from Continuing Operations
This refers to the earnings generated from the normal business activities excluding one-time transactions, discontinued operations, and other irregular items.
Loss on Discontinuance
A financial loss that occurs as a result of the cessation of a business unit or operation.
- Construct and analyze partial income statements with various income and expense components.
Verified Answer
AA
Anand AggarwalJul 12, 2024
Final Answer :
Income from continuing operations $420,000 Discontinued operations Loss on discontinued division, net of $12,500 income tax savings 37,500 Net income 382,500\begin{array}{llr} \text { Income from continuing operations } &\$ 420,000\\ \text { Discontinued operations } &\\ \text { Loss on discontinued division, net of \( \$ 12,500 \) income tax savings } &37,500\\ \text { Net income } &382,500\\\end{array} Income from continuing operations Discontinued operations Loss on discontinued division, net of $12,500 income tax savings Net income $420,00037,500382,500
Learning Objectives
- Construct and analyze partial income statements with various income and expense components.
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