Question

Freda's Florist reported the following before-tax income statement items for the year ended December 31, 2021: Operating income $ 255,000 Income on discontinued operations 67,000 All income statement items are subject to a 25% income tax rate. In its 2021 income statement, Freda's separately stated income tax expense and total income tax expense would be: Multiple Choice $80,500 and $130,500, respectively. $80,500 and $80,500, respectively. $80,500 and $63,750, respectively. $63,750 and $80,500, respectively.

Answer 1

Answer:

$63,750 and $80,500, respectively.

Explanation:

Operating income : 255,000 x 0.25   =  63,750

Discontinued:   67,000 x   0.25 =    16,750

The Operation Income will be disclosure the pre-tax incoem tax expense adn after-tax result

While, the discontinued operation will be disclosure after-tax therefore it will not be stated in the income statement their amount of income tax

However, the company will have to pay those taxes the total income tax will be the sum of both.