Final answer:
The income tax expense reported on the income statement would be $18,000.
Step-by-step explanation:
The income tax expense reported on the face of the income statement can be calculated by multiplying the pre-tax income by the tax rate. In this case, the pre-tax income is calculated by subtracting the cost of goods sold, salaries and wages expense, depreciation expense, dividend revenue, utilities expense, discontinued operations loss, and interest expense from the sales revenue. Using the given pre-tax amounts:
Sales revenue: $1,000,000
Cost of goods sold: $600,000
Salaries and wages expense: $80,000
Depreciation expense: $110,000
Dividend revenue: $90,000
Utilities expense: $10,000
Discontinued operations loss: $100,000
Interest expense: $20,000
Pre-tax income = Sales revenue - Cost of goods sold - Salaries and wages expense - Depreciation expense - Dividend revenue - Utilities expense - Discontinued operations loss - Interest expense
Pre-tax income = $1,000,000 - $600,000 - $80,000 - $110,000 - $90,000 - $10,000 - $100,000 - $20,000
Pre-tax income = $90,000
Income tax expense = Pre-tax income * Tax rate
Income tax expense = $90,000 * 0.20
Income tax expense = $18,000