Whats happening to me, I got this one wrong… Duster Corporations year-end income statement reported the following: Operating income $187,000 Results from discontinued operations: Loss from segment operations ( net of $1,440 tax effect) ($2,160) Gain on segment disposal (net of $8,640 tax effect) 12,960 10,800 Gain on sale of equipment 3,400 Interest expense 12,400 Extraordinary loss (net of $2,200 tax benefit) 3,300 Income tax expense 71,200 Calculate Dusters income from continuing operations for the year. A) $274,000. B) $106,800. C) $187,000. D) $114,300. E) $103,500.
Whats the ans?
B Not including: Results from discontinued operations: Loss from segment operations ( net of $1,440 tax effect) ($2,160) Gain on segment disposal (net of $8,640 tax effect) 12,960 10,800 Extraordinary loss (net of $2,200 tax benefit) 3,300
gain on sale of eq is income from continued operations?
I thought gain on sale of eq would be investing income and not part of continuing operation. Can someone please clarify this.
B?? Operating income $187,000 - Interest expense 12,400 - Income tax expense 71,200 + Gain on sale of equipment 3,400 ---------------------- income from continuing operations 106800 ---------------------- * u probably got it wrong because normally "Loss from segment operations " and "Gain on segment disposal " would fall under ‘unusual OR infrequent items’ and used while computing ’ income from continuing operations '…while here its under the section “Results from discontinued operations:” and hence should not be included.
what Lichi said looks correct.
thanks Lichi, that makes sense.