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.

Question

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The Answer of 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.

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