Required information Problem 13-6AA Income statement computations and format LO A2 [The following information applies to the...

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Answer 2a)

Income from continuing operations before income taxes is $342,120.

Answer 2b)

Income taxes expense is $111,479.

Answer 2c)

Net Income from continuing operations is $230,641.

Workings:

Olinda Corporation
Income Statement
For Year Ended December 2017
Net sales	$10,08,500
Cost of goods sold	$4,92,500
Gross profit	$5,16,000
Operating Expenses:
Depreciation expense—Equipment	$35,000
Depreciation expense—Buildings	$53,000
Other operating expenses	$1,07,400
Total Operating Expenses	$1,95,400
Operating profit	$3,20,600
Less: Correction of overstatement of prior year’s sales (pretax)	-$17,000
Less: Loss on sale of equipment	-$26,850
Add: Interest revenue	$15,000
Add: Gain from settlement of lawsuit	$45,000
Add: Gain on insurance recovery of tornado damage	$30,120
Less: Loss from settlement of lawsuit	-$24,750
Income Before Tax from Continuing operations	$3,42,120
*Less: Income tax expense [113,900 + 34%(342120-335000)]**	-$1,11,479
Net Income from continuing operations	$2,30,641

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