Question

The following income statement does not reflect intraperiod tax allocation. INCOME STATEMENT For the Fiscal Year Ended March 31, 2021 ($ in millions) Sales revenue Cost of goods sold Gross profit Operating expenses Income tax expense Income before discontinued operations Loss from discontinued operations Net income $ 822 (356) 466 (182) (49) 235 (88) $ 147 The company's tax rate is 25%. Required: Recast the income statement to reflect intraperiod tax allocation. (Loss amounts should be indicated with a minus sign. Enter your answers in millions (i.e., 5,500,000 should be entered as 5.5).) X Answer is not complete. Income Statement For the fiscal year ended March 31, 2021 ($ in millions) 822 Sales revenue Cost of goods sold Gross profit (loss) Operating expenses Income from continuing operations before income taxes Income tax expense Income before discontinued operations Loss from discontinued operations, net of tax Loss from discontinued operations, net of tax Net income (loss) (356) 466 (182) 284 (12) 272

Answer 1

Income Statement
For the fiscal year ended March 31,2021
	($ in millions)
Sales revenue	$822
Cost of goods sold	($356)
Gross profit (loss)	$466
Operating expenses	($182)
Income from continuing operations before income taxes	$284
income tax expense ($284 x 25%)	($71)
Income before discontinued operations	$213
Loss from discontinued operations, net of tax	($66)
Net income (loss)	$147

Calculations:

Loss from discontinued operations, Gross	$88
(Less): Income tax expense ($88 x 25%)	($22)
Loss from discountinued operations, net of tax	$66