Answer:
a. Net income=$1,278,000
b. Losses from discontinued operations=$344,000
c. Income tax expense=$448,000
d. Income from continuing operations=$1,102,960
Explanation:
a). Determine net income
net income=total income-total losses
where;
total income=$1,622,000
total losses=operation loss+loss on disposal
where;
operation loss=$222,000
loss on disposal=$122,000
replacing;
total losses=222,000+122,000=$344,000
net income=1,622,000-344,000=$1,278,000
net income=$1,278,000
b). losses from discontinued operations=total losses=$344,000
losses from discontinued operations=$344,000
c). income tax expense before discontinued operations are reported
Income tax expense=tax rate×net income before discontinued operations
where;
tax rate=32%
net income before discontinued operations=$1,622,000-222,000=$1,400,000
replacing;
Income tax expense=(32/100)×1,400,000=$448,000
Income tax expense=$448,000
d). Income from continuing operations
Income from continuing operations=1,622,000-(0.32×1,622,000)=$1,102,960
