Ask Question
11 September, 23:08

The following is a partial year-end adjusted trial balance. Account Title Debits Credits Sales revenue $ 460,000 Loss on sale of investments $ 54,000 Interest revenue 6,500 Cost of goods sold 240,000 General and administrative expense 56,000 Restructuring costs 58,000 Selling expense 33,000 Income tax expense? 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.

+3
Answers (1)
  1. 11 September, 23:17
    0
    a) Operating Income = $73,000

    b) Net income before income tax = $25,500

    Explanation:

    First part of the question is to determine the operating income or loss of the business

    It is calculated as follows

    Particulars Amount

    Sales Revenue $460,000

    Subtract: Cost of goods sold ($240,000)

    General and Administrative exp. ($56,000)

    Restructuring Costs ($58,000)

    Selling Expenses ($33,000)

    Operating Income $73,000

    Second part is to determine the income or loss before income taxes

    Particulars Amount

    Operating Income $73,000

    Add: Interest Revenue $6,500

    Deduct:Loss on sales of investment ($54,000)

    Income before Income Tax $25,500

    Finally, the Net Income or loss after Income tax

    $25,500 x. 25 = $6,375
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “The following is a partial year-end adjusted trial balance. Account Title Debits Credits Sales revenue $ 460,000 Loss on sale of ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers