Share
Explore BrainMass

Income statement form - Vincent Corporation

Vincent Corporation had income from continuing operations of $800,000 (after taxes) in 2007. In addition, the following information, which has not been considered, is as follows.

1. In 2007, Vincent experienced an uninsured earthquake loss in the amount of $200,000.

2. A machine was sold for $140,000 cash during the year at a time when its book value was $110,000. (Depreciation has been properly recorded.) The company often sells machinery of this type.

3. Vincent decided to discontinue its stereo division in 2007. During the current year, the loss on the disposal of this component of the business was $150,000 less applicable taxes.

Instructions
Present in good form the income statement of Vincent Corporation for 2007 starting with "income from continuing operations." Assume that Vincent's tax rate is 30% and 200,000 shares of com-mon stock were outstanding during the year.

Solution Preview

Vincent Corporation had income from continuing operations of $800,000 (after taxes) in 2007. In addition, the following information, which has not been considered, is as follows.

1. In 2007, Vincent experienced an uninsured earthquake loss in the amount of $200,000.
This is considered to be an extraordinary item.

2. A machine was sold for $140,000 cash during the year at a time when its book value was $110,000. (Depreciation has been properly recorded.) The ...

Solution Summary

This solution is comprised of a detailed explanation to present in good form the income statement of Vincent Corporation for 2007 starting with "income from continuing operations." Assume that Vincent's tax rate is 30% and 200,000 shares of com-mon stock were outstanding during the year.

$2.19