Question

Cendant Corporation's results for the year ended December 31, 2016, include the following material items: Sales revenue $6,330,000 Cost of goods sold 3,750,000 Selling and administrative expenses 1,280,000 Loss on sale of investments 191,000 Loss on discontinued operations 483,000 Restructuring costs 77,000 Cendant Corporation's income from continuing operations before income taxes for 2016 is:________________.

Answer 1

Answer:

$1,032,000

Explanation:

Gross Profit:

= Sales revenue - Cost of goods sold

= $6,330,000 - $3,750,000

= $2,580,000

Net income before adjustment:

= Gross profit - Selling and administrative Expenses

= $2,580,000 - $1,280,000

= $1,300,000

Income from continuing operations:

= Net income before adjustment - Loss on sale of investment - Restructuring cost

= $1,300,000 - $191,000  - $77,000

= $1,032,000