Maulder Corporation has income from continuing operations of $290,000for the year ended December 31, 2014. It also has the following items (before considering income taxes).
1.
An extraordinary loss of $70,000.
2.
A gain of $35,000on the discontinuance of a division.
3.
A correction of an error in last year’s financial statements that resulted in a $25,000understatement of 2013 net income.
Assume all items are subject to income taxes at a30% tax rate. Prepare an income statement, beginning with income from continuing operations.
MAULDER CORPORATION Partial Income Statement For the Year Ended December 31, 2014
Discontinued OperationsDividendsExpensesExtraordinary ItemExtraordinary LossGain on Discontinued DivisionIncome Before Extraordinary ItemIncome Before Income TaxesIncome From Continuing OperationsIncome Tax ExpenseLoss from Operations of Music DivisionNet Income / (Loss)Retained EarningsTotal ExpensesTotal Revenues
$
Discontinued OperationsDividendsExpensesExtraordinary ItemExtraordinary LossGain on Discontinued DivisionIncome Before Extraordinary ItemIncome Before Income TaxesIncome From Continuing OperationsIncome Tax ExpenseLoss from Operations of Music DivisionNet Income / (Loss)Retained EarningsTotal ExpensesTotal Revenues
Discontinued OperationsDividendsExpensesExtraordinary ItemExtraordinary LossGain on Discontinued DivisionIncome Before Extraordinary ItemIncome Before Income TaxesIncome From Continuing OperationsIncome Tax ExpenseLoss from Operations of Music DivisionNet Income / (Loss)Retained EarningsTotal ExpensesTotal Revenues
Discontinued OperationsDividendsExpensesExtraordinary ItemExtraordinary LossGain on Discontinued DivisionIncome Before Extraordinary ItemIncome Before Income TaxesIncome From Continuing OperationsIncome Tax ExpenseLoss from Operations of Music DivisionNet Income / (Loss)Retained EarningsTotal ExpensesTotal Revenues
Discontinued OperationsDividendsExpensesExtraordinary ItemExtraordinary LossGain on Discontinued DivisionIncome Before Extraordinary ItemIncome Before Income TaxesIncome From Continuing OperationsIncome Tax ExpenseLoss from Operations of Music DivisionNet Income / (Loss)Retained EarningsTotal ExpensesTotal Revenues
Discontinued OperationsDividendsExpensesExtraordinary ItemExtraordinary LossGain on Discontinued DivisionIncome Before Extraordinary ItemIncome Before Income TaxesIncome From Continuing OperationsIncome Tax ExpenseLoss from Operations of Music DivisionNet Income / (Loss)Retained EarningsTotal ExpensesTotal Revenues
Discontinued OperationsDividendsExpensesExtraordinary ItemExtraordinary LossGain on Discontinued DivisionIncome Before Extraordinary ItemIncome Before Income TaxesIncome From Continuing OperationsIncome Tax ExpenseLoss from Operations of Music DivisionNet Income / (Loss)Retained EarningsTotal ExpensesTotal Revenues
