Question

Marco Industries has an income tax rate of 30%. Their reported income from operations is $350,000; The company also had a loss from flood damage of $120,000. Which of the following is the correct amount of the company’s net income from continuing operations?

A : $230,000.
B : $301,000.
C : $161,000.
D : $430,000.

Answer 1

Net income from continuing operations for Marco Industries is calculated by subtracting tax from the reported income from operations. The tax is 30% of $350,000 which equates to $105,000. Therefore, the net income from continuing operations should be $245,000. None of the provided options

Step-by-step explanation:

To calculate Marco Industries' net income from continuing operations, we first consider their reported income from operations of $350,000. Since they had a loss from flood damage of $120,000, this extraordinary loss is excluded from continuing operations. Applying the income tax rate of 30% to the income from continuing operations we get:

Income from continuing operations before taxes: $350,000
Tax on continuing operations (30% of $350,000): $105,000
Net income from continuing operations: $350,000 - $105,000 = $245,000

None of the provided options match this calculation, suggesting a possible error in the question or the answer choices. None of the provided options