Golden Corp. disposed of a business component prior to its year-end at a loss of $9,000 before tax. The company incurred a before tax loss from the discontinued component of $36,000 during the year. The following records for Golden Corp. for the year ended December 31 exclude amounts related to the discontinued business component.

Note: Restructuring costs of the company's operations are considered unusual and infrequent

Sales revenue =	$900,000
Interest expense =	20,000
Gain on sale of investment =	40,000
Loss on sale of patent =	6,000
Selling expense =	70,000
Cost of goods sold =	600,000
General and administrative expense =	130,000
Restructuring costs	50,000

Part One

Compute the following subtotals that are shown in a multiple-step income statement. Assume an income tax rate of 25%.

a. Gross Profit 

b. Operating income 

c. Income from continuing operations before income taxes 

d. Income tax expense 

e. Income from continuing operations 

f. Loss from discontinued component, net of tax 

g. Net income (loss) 

Part Two

Assume the same information in Part One except that the sale of the discontinued component was not complete as of December 31. On December 31, the fair value of the business component was $100,000, estimated costs to sell were $14,000, and the carrying value was $120,000 . 

Compute the following subtotals that are shown in a multiple-step income statement for the year ended December 31. Assume an income tax rate of 25%

a. Gross Profit 

b. Operating income 

c. Income from continuing operations before income taxes 

d. Income tax expense 

e. Income from continuing operations 

f. Loss from discontinued component, net of tax 

g. Net income (loss) 

Answer rating: 100% (QA)

Part One a Gross Profit Sales revenue Cost of goods sold 900000 600000 300000 b Operating income Gro... View the full answer