Question

The following is a partial year-end adjusted trial balance. Debits Credits $300,000 $ 22,000 4,000 Account Title Sales revenue Loss on sale of investments Interest revenue Cost of goods sold General and administrative expense Restructuring costs Selling expense Income tax expense 160,000 40,000 50,000 25,000 Income tax expense has not yet been recorded. The income tax rate is 25% a. Determine the operating income (loss). b. Determine the income (loss) before income taxes. c. Determine the net income (loss). a. Operating income (loss) Income (loss) before income taxes c. Net income (loss)

Answer 1

Operating income (loss) $ 25,000 | Income (loss before income taxes $7,000 Net income (loss) $ 5,250 Calculation: la) expenses Sales revenue Cost of goods sold General and administrative Restructuring costs Selling expenses Operating income € 300,000 $ (160,000) & (40,000) $ (50,000) $ (25,000) $ 25,000 (b) Operating income Add: Interest revenue Less: LoAs on sale of investments Income before income taxes $ 25,000 & 4,000 $ 22,000 $ 7,000 Income before income taxes Less: Income tax expense (25%) Net Income $ 7,000 $ 1,750 & 5, 250