Answered

Westonci.ca connects you with experts who provide insightful answers to your questions. Join us today and start learning! Join our Q&A platform and get accurate answers to all your questions from professionals across multiple disciplines. Discover detailed answers to your questions from a wide network of experts on our comprehensive Q&A platform.

Howard Co.'s 2016 income from continuing operations before income taxes was $280,000. Howard Co. reported before-tax income on discontinued operations of $50,000. All tax items are subject to a 40% tax rate. In its income statement for 2016, Howard Co. would show which of the following line-item amounts for net income and income tax expense:

a. $213,600 and $117,600 respectively.
b. $356,000 and $318,800 respectively.
c. $117,600 and $213,600 respectively.
d. $232,000 and $269,200 respectively.

Sagot :

Tundexi

Answer:

$198,000 and $112,000 respectively

Explanation:

Income tax expense = Income from continuing operations before income taxes * Tax rate

Income tax expense = $280,000 * 40%

Income tax expense = $112,000

Net income = Income from continuing operations before income taxes - Income tax expense + (Before-tax income on discontinued operations * (1 - 40%)

Net income = ($280,000 - $112,000) + ($50,000 * 0.6)

Net income = $168,000 + $30,000

Net income = $198,000

We hope you found what you were looking for. Feel free to revisit us for more answers and updated information. We appreciate your visit. Our platform is always here to offer accurate and reliable answers. Return anytime. Thank you for visiting Westonci.ca, your go-to source for reliable answers. Come back soon for more expert insights.