Question

Karl Corp.’s trial balance of income statement accounts for the year ended December 31, Year 1, included the following: Debit Credit Sales $80,000 Cost of sales $ 60,000 Administrative expenses 15,000 Loss on sale of equipment 9,000 Commissions to salespersons 10,000 Interest revenue 5,000 Freight-out 3,000 Loss on disposal of a major operating segment 10,000 Bad debt expense 3,000 Totals $110,000 $85,000 Other Information: Karl’s income tax rate is 30%. On Karl’s income statement for Year 1, the loss on discontinued operations is

Answer 1

Answer and Explanation:

$85,000 of revenues - $110,000 + $10,000 of Expenses = $ -15,000 Loss x 30% Tax ($4500) = $ -19,500