Problem 13-6AA Income statement computations and format LO A2

[The following information applies to the questions displayed below.]

Selected account balances from the adjusted trial balance for Olinda Corporation as of its calendar year end December 31, 2013, follow.

		Debit	Credit
a.	Interest revenue						$	14,600
b.	Depreciation expenseEquipment.		$	34,600
c.	Loss on sale of equipment			26,450
d.	Accounts payable							44,600
e.	Other operating expenses			107,000
f.	Accumulated depreciationEquipment							72,200
g.	Gain from settlement of lawsuit							44,600
h.	Accumulated depreciationBuildings							175,700
i.	Loss from operating a discontinued segment (pretax)			18,850
j.	Gain on insurance recovery of tornado damage (pretax and extraordinary)							29,720
k.	Net sales							1,004,500
l.	Depreciation expenseBuildings			52,600
m.	Correction of overstatement of prior years sales (pretax)			16,600
n.	Gain on sale of discontinued segments assets (pretax)							37,000
o.	Loss from settlement of lawsuit			24,350
p.	Income taxes expense			?
q.	Cost of goods sold			488,500

Problem 13-6AA Part 1

Required:
1.	Assume that the companys income tax rate is 30% for all items. Compute the tax effects and after-tax amounts of the four items labeled pretax.(Loss amountsshould be indicated with a minus sign.)
	30% Tax Pretax | Effect | After-Tax Loss from operating a discontinued segment _______________|______________ |______________________ Gain on insurance recovery of tornado damage ____________|_______________|____________________ Correction of overstatement of prior year's sales____________|______________|____________________ Gain on sale of discontinued segment's assets______________ |______________|_________________________

Problem 13-6AA Part 2

2.1	What is the amount of income from continuing operations before income taxes? Income from continuing operations before taxes.___________________

2.2 What is the amount of the income taxes expense?

Income taxes expense._____________________

2.3	What is the amount of income from continuing operations? Income from continuing operations after taxes.________________

Problem 13-6AA Part 3

3.	What is the total amount of after-tax income (loss) associated with the discontinued segment? After-tax income from discontinued segment.______________________

Problem 13-6AA Part 4

4. What is the amount of income (loss) before the extraordinary items?

Income before extraordinary items.________________

Problem 13-6AA Part 5

5.	What is the amount of net income for the year? Net income.____________________