Question

Provincial Inc. reported the following before-tax income statement items:Operating income $ 600,000Loss on discontinued operations 100,000Provincial has a 30% income tax rate.Provincial would report the following amount of income tax expense as a separately stated line item in the income statement:(A) $180,000.
(B) $198,000.(C) $150,000.(D) $168,000.

Answer 1

Answer:

Option (A) $180,000

Explanation:

The amount of income tax expense has to be reported by the provincial is shown as  

$600,000 × 30% = $180,000

Income tax benefits of ($100,000 × 30% = $30,000) should be disclosed separately in the discontinued operations section of income statement.

Therefore, the correct answer is option (A) $ 180,000.