The following information relates to Spiker Manufacturing Inc. for the fiscal year ended July 31, 2013. Assume
Question:
Taxable income, year ending July 31, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,015,000
Non-operating items included in taxable income:
Extraordinary gain . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121,000
Loss from disposal of a business component . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (130,000)
Prior-year error resulting in income overstatement for fiscal year 2012; tax refund to be requested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ............ 90,000
Retained earnings, August 1, 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,520,000
Instructions:
Prepare the income statement for Spiker Manufacturing Inc. beginning with Income from continuing operations before income taxes and the retained earnings statement for the fiscal year ended July 31, 2013. Apply intra-period income tax allocation procedures to both statements?
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