Question

At Blossom Company, events and transactions during 2020 included the following. The tax rate for all items is 20%. (1) Depreciation for 2018 was found to be understated by $148000. (2) A strike by the employees of a supplier resulted in a loss of $124000. (3) The inventory at December 31, 2018 was overstated by $199000. The effect of these events and transactions on 2020 income from continuing operations net of tax would be

Answer 1

$99,200

Step-by-step explanation:

Calculation to determine The effect of these events and transactions on 2020 income from continuing operations net of tax would be

Using this formula

Effect income from continuing operations net of tax=Strike loss amount-(Strike loss amount*Tax rate )

Let plug in the formula

Effect income from continuing operations net of tax=$124,000 - ($124,000 × .20)

Effect income from continuing operations net of tax=$124,000-$24,800

Effect income from continuing operations net of tax=$99,200

Therefore The effect of these events and transactions on 2020 income from continuing operations net of tax would be $99,200