Howard Co.'s 2021 income from continuing operations before income taxes was $298,000. Howard Co. reported before-tax income on discontinued operations of $64,000. All tax items are subject to a 25% tax rate. In its income statement for 2021, Howard Co. would show the following line-item amounts for income tax expense and net income: Multiple Choice $74,500 and $271,500 respectively. $234,000 and $282,000 respectively. $271,500 and $74,500 respectively. $362,000 and $314,000 respectively.

Question

Bambi

Business

19 May, 01:10

Howard Co.'s 2021 income from continuing operations before income taxes was $298,000. Howard Co. reported before-tax income on discontinued operations of $64,000. All tax items are subject to a 25% tax rate. In its income statement for 2021, Howard Co. would show the following line-item amounts for income tax expense and net income: Multiple Choice $74,500 and $271,500 respectively. $234,000 and $282,000 respectively. $271,500 and $74,500 respectively. $362,000 and $314,000 respectively.

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Answers (1)

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Chanel · Answer 1

The answer is A.

Explanation:

Income from continuing operations before income taxes ... $298,000

Less: Income tax expense from continuing operations ($298,00025%) ... $74,500

Income from continuing operations ... $223,500

Income from discontinued operations ... $48,000 [$64,000 - (25% of $64,000) ]

Net income ... $271,500