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In: Accounting

Selected account balances from the adjusted trial balance for Olinda Corporation as of its calendar year-end...

Selected account balances from the adjusted trial balance for Olinda Corporation as of its calendar year-end December 31 follow.

Debit Credit
a. Interest revenue $ 14,000
b. Depreciation expense—Equipment $ 34,000
c. Loss on sale of equipment 25,850
d. Accounts payable 44,000
e. Other operating expenses 106,400
f. Accumulated depreciation—Equipment 71,600
g. Gain from settlement of lawsuit 44,000
h. Accumulated depreciation—Buildings 174,500
i. Loss from operating a discontinued segment (pretax) 18,250
j. Gain on insurance recovery of tornado damage 20,000
k. Net sales 998,000
l. Depreciation expense—Buildings 52,000
m. Correction of overstatement of prior year’s sales (pretax) 16,000
n. Gain on sale of discontinued segment’s assets (pretax) 34,000
o. Loss from settlement of lawsuit 23,250
p. Income tax expense ?
q. Cost of goods sold 482,500

2a. What is the amount of income from continuing operations before income taxes?
2b. What is the amount of the income tax expense?
2c. What is the amount of income from continuing operations?

Assume that the company’s income tax rate is 30% for all items.

Solutions

Expert Solution

Please find attachment of Income statement.

Answer to your questions are :=

2a. Income from continuing operations before income taxes is 351750

2b. The Income tax expense is 105525

2c.Income from continuing operations is 246225

ekkarill92 answered 6 months ago
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