At the Beginning of 2014, Jeffrey Company Disposed of a Segment

Essay

At the beginning of 2014, Jeffrey Company disposed of a segment of its business and incurred a pre-tax loss of $40,000 on the disposal, which resulted in an after-tax loss on disposal of $32,000. In the same year, a flood caused $15,000 of damages to the building. The flood damage qualified as an extraordinary item. The resulting extraordinary loss net of tax was $12,000. Income from continuing operations before taxes was $100,000 for 2014 and a 20% tax rate applied to all of the items above. Prepare a partial income statement starting with income from continuing operations before taxes for the year ending 2014 and concluding with net income.