For its fiscal year ending October 31, 2015, Haas Corporation reports the following partial data shown below.
Question:
For its fiscal year ending October 31, 2015, Haas Corporation reports the following partial data shown below.
Income before income taxes .........$540,000
Income tax expense (30% x $420,000) ..... 126,000
Income before extraordinary items ...... 414,000
Extraordinary loss from flood .......... 120,000
Net income ...............$294,000
The flood loss is considered an extraordinary item. The income tax rate is 30% on all items.
Instructions
(a) Prepare a correct income statement, beginning with income before income taxes.
(b) Explain in memo form why the income statement data are misleading.
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Related Book For
Financial Accounting
ISBN: 9781118334324
9th Edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
Question Posted: