Leigh Corp. disposed of its Knit Products Division in June of 2020 at a loss of $19,000 before tax. Prior to the sale, the Knit Products Division (considered a separate business component) reported a net loss from operations of $202,500 before tax. Leigh Corp. reported income from continuing operations of $450,000 before tax for 2020. a. Assuming an income tax rate of 25%, prepare an income statement beginning with Income from Continuing Operations. Ignore earnings per share disclosures.

Question

Brianna Davila

Business

23 January, 17:11

Leigh Corp. disposed of its Knit Products Division in June of 2020 at a loss of $19,000 before tax. Prior to the sale, the Knit Products Division (considered a separate business component) reported a net loss from operations of $202,500 before tax. Leigh Corp. reported income from continuing operations of $450,000 before tax for 2020. a. Assuming an income tax rate of 25%, prepare an income statement beginning with Income from Continuing Operations. Ignore earnings per share disclosures.

+5

Answers (1)

Know the Answer?

Janiya Ross · Answer 1

Leigh Corp.

Income Statement for the year ended MM DD, YY

Income from continuing operations before tax $450,000

Less: Tax 25% (450,000 x 25%) $180,000

Income from continuing operations after tax $270,000

Loss from discontinuing operation ($19,000)

Loss from sale of discontinuing operation ($202,500)

Total Comprehensive Income $48,500