Question

Misty Company reported the following before-tax items during the current year:Sales revenue $ 600Selling and administrative expenses 250Restructuring charges 20Loss on discontinued operations 50Misty's effective tax rate is 40%.What is Misty's income from continuing operations?

(A) $198
(B) $330.(C) $210.(D) $360.

Answer 1

$

Sales revenue 600

Selling and administrative expenses (250)

Restructuring charges (20)

Profit before tax 330

Tax @ 40% 132

Income from continuing operations 198

The correct answer is A

Step-by-step explanation:

Income from continuing operation is the excess of sales revenue over selling and administrative expenses, restructuring charges and tax.

Tax is 40% of profit before tax.