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8_murik_8 [283]
3 years ago
12

Howard Co.'s 2018 income from continuing operations before income taxes was $294,000. Howard Co. reported before-tax income on d

iscontinued operations of $62,000. All tax items are subject to a 40% tax rate. In its income statement for 2018. Howard Co. would show the following line-item amounts for income tax expense and net income:
a. $213600 and $117600 respectively
b. $356000 and $318800 respectively
c. $117600 and $213600 respectively
d. $ 232000 and $ 269200 respectively
Business
1 answer:
schepotkina [342]3 years ago
7 0

Answer: c. $117,600 and $213,600 respectively

Explanation:

Income tax expense = Income before tax * tax rate

= 294,000 * 40%

= $117,600

Net Income = Income before tax - tax expense + ( Tax adjusted discontinued operations income)

= 294,000 - 117,600 + ( 62,000 * (1 - 40%))

= $213,600

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