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Major Co. reported 2016 income of $315,000 from continuing operations before income taxes and a before-tax loss on discontinued operations of $63,000. All income is subject to a 40% tax rate. In the 2016 income statement, Major Co. would show the following line-item amounts for income tax expense and net income:

Respuesta :

Answer: The income tax expense $100,800, net income $252,000

Explanation:

To calculate net income

Income from continuing operation before income tax - income before tax-loss on discontinued operation

= 315,000 - 63,000

= 252,000

To calculate line item amount for income tax expense ,we use the formula

Income tax expense = Taxable income × tax rate

Taxable income = $252,000 , Tax rate = 40% ( 40 ÷ 100) = 0.4

= 252,000 × 0.4

= $100,800

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