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Problem 17-6AA (Algo) Income statement computations and format LO A2

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[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 follow. Assume that the companys income tax rate is 40% for all items.

		Debit	Credit
a.	Interest revenue		$ 14,500
b.	Depreciation expenseEquipment	$ 34,500
c.	Loss on sale of equipment	26,350
d.	Accounts payable		44,500
e.	Other operating expenses	106,900
f.	Accumulated depreciationEquipment		72,100
g.	Gain from settlement of lawsuit		44,500
h.	Accumulated depreciationBuildings		175,500
i.	Loss from operating a discontinued segment (pretax)	18,750
j.	Gain on insurance recovery of tornado damage		29,620
k.	Net sales		1,003,500
l.	Depreciation expenseBuildings	52,500
m.	Correction of overstatement of prior years sales (pretax)	16,500
n.	Gain on sale of discontinued segments assets (pretax)		36,500
o.	Loss from settlement of lawsuit	24,250
p.	Income tax expense	?
q.	Cost of goods sold	487,500

Problem 17-6AA (Algo) Part 2

2a. What is the amount of income from continuing operations before income taxes? 2b. What is the amount of the income tax expense? 2c. What is the amount of income from continuing operations?

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

4. What is the amount of net income for the year?