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For its fiscal year ending October 31, 2010, Molini Corporation reports the following partial data.
Income before income taxes $540,000
Income tax expense (30% $390,000) 117,000
Income before extraordinary items 423,000
Extraordinary loss from flood 150,000
Net income $273,000
For its fiscal year ending October 31, 2010, Molini Corporation reports the following partial data.
Income before income taxes $540,000
Income tax expense (30% $390,000) 117,000
Income before extraordinary items 423,000
Extraordinary loss from flood 150,000
Net income $273,000
The flood loss is considered an extraordinary item. The income tax rate is 30% on all items.
Instructions
Complete the correct income statement, beginning with income before income taxes.
MOLINI CORPORATION
Partial Income Statement
For the Year Ended October 31, 2010
Income before income taxes $
Income tax expenseExtraordinary loss from floodIncome before extraordinary item
Income before extraordinary itemIncome tax expenseExtraordinary loss from flood
Income before extraordinary itemIncome tax expenseExtraordinary loss from flood
Net income $
The flood loss is considered an extraordinary item. The income tax rate is 30% on all items.
Instructions
Explain in memo form why the income statement data are misleading
3 answers
Solution Close
E15-12 (a)
MOLINI CORPORATION
Partial Income Statement
For the Year Ended October 31, 2008
Income before income taxes $540,000
Income tax expense ($540,000 × 30%)
162,000
Income before extraordinary item 378,000
Extraordinary loss from flood, net of $45,000
tax savings ($150,000 × 30%)
105,000
Net income
$273,000
Copyright © 2000-2011 by John Wiley & Sons, Inc. or related companies. All rights reserved.
E15-12 (a)
MOLINI CORPORATION
Partial Income Statement
For the Year Ended October 31, 2008
Income before income taxes $540,000
Income tax expense ($540,000 × 30%)
162,000
Income before extraordinary item 378,000
Extraordinary loss from flood, net of $45,000
tax savings ($150,000 × 30%)
105,000
Net income
$273,000
Copyright © 2000-2011 by John Wiley & Sons, Inc. or related companies. All rights reserved.
Complete the correct income statement, beginning with income before income taxes.
MOLINI CORPORATION
Partial Income Statement
For the Year Ended October 31, 2008
Income before income taxes $ 540000
Income tax expense
162000
Income before extraordinary item 378000
Extraordinary loss from flood
105000
Net income
$ 273000
MOLINI CORPORATION
Partial Income Statement
For the Year Ended October 31, 2008
Income before income taxes $ 540000
Income tax expense
162000
Income before extraordinary item 378000
Extraordinary loss from flood
105000
Net income
$ 273000
0 answers