The Stam Corporation reports the following pretax accounting (and taxable) income items during 2007:Income from continuing operations ..........$90,000aLoss from operations of a discontinued division ......(10,000)Gain from the disposal of the discontinued division ....25,000Extraordinary gain .................20,000a. Of this amount, revenues are $320,000 and expenses are .$230,000.Required1. Prepare the journal entry necessary to record the 2007 intraperiod income tax allocation in regard
Chapter 19, Exercises #13
The Stam Corporation reports the following pretax accounting (and taxable) income items during 2007:
Income from continuing operations ..........$90,000a
Loss from operations of a discontinued division ......(10,000)
Gain from the disposal of the discontinued division ....25,000
Extraordinary gain .................20,000
a. Of this amount, revenues are $320,000 and expenses are .$230,000.
Required
1. Prepare the journal entry necessary to record the 2007 intraperiod income tax allocation in regard to the preceding information. Assume a tax rate of 15% on the first $40,000 of income and a rate of 30% on income in excess of $40,000.
2. Prepare Stam’s 2007 income statement.
Corporation
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...
Income from continuing operations ..........$90,000a
Loss from operations of a discontinued division ......(10,000)
Gain from the disposal of the discontinued division ....25,000
Extraordinary gain .................20,000
a. Of this amount, revenues are $320,000 and expenses are .$230,000.
Required
1. Prepare the journal entry necessary to record the 2007 intraperiod income tax allocation in regard to the preceding information. Assume a tax rate of 15% on the first $40,000 of income and a rate of 30% on income in excess of $40,000.
2. Prepare Stam’s 2007 income statement.
Corporation
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...
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Answer
1. 2007 Dec. 31 Income Tax Expense [($40,000 x 0.15) + ($50,000 x 0.30)] 21,000 Gain from the Dispo…View the full answer
Related Book For 
Intermediate Accounting
10th Edition
Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones
ISBN: 978-0324300987