Deane Company Has Income from Continuing Operations of $520000 for the Year

Essay

Deane Company has income from continuing operations of $520000 for the year ended December 31 2017. It also has the following items (before considering income taxes):
(1) A gain of $80000 on the discontinuance of a major segment.
(2) A correction of an error in last year's financial statement that resulted in a $60000 overstatement of 2016 net income.
Assume all items are subject to income taxes at a 25% tax rate.
Instructions
(a) Prepare an income statement beginning with income from continuing operations.
(b) Indicate the statement presentation of any item not included in (a) above.