Milton Company has income from continuing operations of $480,000 for the year ended December 31, 2014. It also has the following items (before considering income taxes):
(1) A gain of $70,000 on the discontinuance of a major division.
(2) A correction of an error in last year's financial statement that resulted in a $90,000 overstatement of 2013 net income.
Assume all items are subject to income taxes at a 30% 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.

Question

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The Answer of Milton Company has income from continuing operations of $480,000 for the year ended December 31, 2014. It also has the following items (before considering income taxes):
(1) A gain of $70,000 on the discontinuance of a major division.
(2) A correction of an error in last year's financial statement that resulted in a $90,000 overstatement of 2013 net income.
Assume all items are subject to income taxes at a 30% 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.

Milton Company Has Income from Continuing Operations of $480,000 for the Year