Question

Problem 17-6AA Income statement computations and format LO A2 [The following information applies to the questions displayed below.] Selected account balances from the adjusted trial balance for Olinda Corporation as of its calendar year-end December 31, 2017, follow. Debit Credit a. Interest revenue $ 14,600 b. Depreciation expense—Equipment. $ 34,600 c. Loss on sale of equipment 26,450 d. Accounts payable 44,600 e. Other operating expenses 107,000 f. Accumulated depreciation—Equipment 72,200 g. Gain from settlement of lawsuit 44,600 h. Accumulated depreciation—Buildings 175,700 i. Loss from operating a discontinued segment (pretax) 18,850 j. Gain on insurance recovery of tornado damage 29,720 k. Net sales 1,004,500 l. Depreciation expense—Buildings 52,600 m. Correction of overstatement of prior year’s sales (pretax) 16,600 n. Gain on sale of discontinued segment’s assets (pretax) 37,000 o. Loss from settlement of lawsuit 24,350 p. Income taxes expense ? q. Cost of goods sold 488,500 Problem 17-6 Part 4 4. What is the amount of net income for the year?

tax rate for all items is 30%

Answer 1

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Olinda Corporation
Income Statement for the year ended December 31
Particulars	Amount $	Amount $
Sales Revenue	1,004,500.00
Less: returns and allowances	-
Net Sales		1,004,500.00
Cost of goods sold		488,500.00
Gross Profit		516,000.00
Other Operating Expense	107,000.00
Depreciation Expense- Equipment	34,600.00
Depreciation Expense- Building	52,600.00
Operating Expense		194,200.00
Operating Income		321,800.00
Interest Income	14,600.00
Gain from settlement of lawsuit	44,600.00
Loss from settlement of lawsuit	(24,350.00)
Gain on insurance recovery of tornado damage	29,720.00
Loss on sale of equipment	(26,450.00)
Other expense and income		38,120.00
Income before tax		359,920.00
Tax expense		107,976.00
Net Income from continuing operations		251,944.00
Income from discontinued operations
Correction of overstatement of prior year’s sales-net of tax	(16,600.00)
Loss on Discontinued Operations-net of tax	(18,850.00)
Gain on Discontinued Operations-net of tax	37,000.00
Income from discontinued operations-pretax	1,550.00
Tax expense	465.00
Net Income from discontinued operations		1,085.00
Net Income		253,029.00