Question

Wildcat Corporation's adjusted trial balance for the year ended December 31, 2021 follows:

Income from continuing operations before income taxes $ 105,000
Gain on disposal of discontinued component 23,500
Loss from operations of discontinued component (45,000 )
Wildcat Corporation is subject to a 25% effective tax rate.
Required: Prepare the December 31, 2021, income statement for Wildcat Corporation, starting with income from continuing operations before income taxes. (Amounts to be deducted should be indicated with a minus sign.)

Answer 1

62625

Step-by-step explanation:

Gain on disposal of discontinued component

Pretax = $23,500

Tax at 25% = $5875

After Tax = $17,625

Loss from operations of discontinued component ()

Pretax = $(45,000)

Tax at 25% = $(11,250)

After Tax = $(33,750)

INCOME STATEMENT

Income from continuing operations before income taxes $105,000

Tax expenses at 25% $26,250

Income from continuing operations before after tax $78,750

Gain on disposal of discontinued component after tax $17,625

Loss from operations of discontinued component after tax $(33,750)

Net Income $62,625