Question

Howard Co.'s 2018 income from continuing operations before income taxes was $297,000. Howard Co. reported before-tax income on discontinued operations of $57,000. All tax items are subject to a 38% tax rate. In its income statement for 2018, Howard Co. would show the following line-item amounts for income tax expense and net income:a. $ 213,600 and $ 117,600 respectivelyb. $ 356,000 and $ 318,800 respectivelyc. $ 117,600 and $ 213,600 respectivelyd. $ 232,000 and $ 269,200 respectively

Answer 1

$112,860,$219,480

Step-by-step explanation:

Income from continuing operations before income taxes $297,000

Income tax expense ($112,860)

(38%×$297,000)

Income from continuing operations $184,140

Add Income on discontinued operations (net of 21,660 tax benefit) $35,340

Net income $219,480

More explanation on Income on discontinued operations

30%×$57,000=$21,660

$57,000- $21,660

=$35,340

Answer 2

Answer: TAX EXPENSE = $112,860;

NET INCOME = $219,480

Step-by-step explanation:

GIVEN the following ;

Income from continuing operation before income taxes = $297,000

Tax rate on all tax items = 38%

Therefore, tax expense = (38% of income from continuing operation before tax)

TAX EXPENSE = 0.38 × $297,000 = $112,860

Income from continued operation after tax = $(297,000 - 112,860) = $184,140

Income from discontinued operation =$57,000 × (1 - 0.38) = $35,340

NET INCOME= (Income from discontinued operation + income from continued operation)

NET INCOME = $(184,140 + 35,340)

=$219,480

TAX EXPENSE = $112,860

NET INCOME = $219,480