Purl Corporation’s income statement for the year ended December 31, 2006, shows the following:
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|
Income before income tax and extraordinary item |
$900,000 |
|
Gain on life insurance coverage—included in the above $900,000 income amount |
100,000 |
|
Extraordinary item—loss due to earthquake damage |
300,000 |
Purl’s tax rate for 2006 is 40%. How much should be reported as the provision for income tax in Purl’s 2006 income statement?
- $200,000
- $240,000
- $320,000
- $360,000