Futura Corporation reported pretax net income of $30,000 in the first quarter of 2016.The company anticipated pretax net income of $90,000 for the year.During the second quarter, after issuing the first-quarter interim statement, Futura decided to discontinue its electronics division and adopted a formal plan for its disposal.
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During the first quarter, the electronics division reported a pretax loss of $70,000 and estimated a $270,000 operating loss for the year.During the second quarter, the division experienced an operating loss of $35,000 prior to the measurement date and $8,000 in the remainder of that quarter.The anticipated loss on the disposal of that division's assets was $40,000.
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Futura had a flat 25% tax rate for 2016.The firm is expecting a $5,000 tax credit attributed to operations outside of the electronic division.Second-quarter pretax income for the non-electronics operations was $40,000.As of the end of the second quarter, annual pretax income of $225,000 was anticipated for continuing operations.
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Required:
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In good form, prepare a schedule showing the income (loss) and tax expense (benefit) determination for the first quarter, the restated first quarter, and the second quarter.

Question

Quizplus · Accepted Answer

The Answer of Futura Corporation reported pretax net income of $30,000 in the first quarter of 2016.The company anticipated pretax net income of $90,000 for the year.During the second quarter, after issuing the first-quarter interim statement, Futura decided to discontinue its electronics division and adopted a formal plan for its disposal.
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During the first quarter, the electronics division reported a pretax loss of $70,000 and estimated a $270,000 operating loss for the year.During the second quarter, the division experienced an operating loss of $35,000 prior to the measurement date and $8,000 in the remainder of that quarter.The anticipated loss on the disposal of that division's assets was $40,000.
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Futura had a flat 25% tax rate for 2016.The firm is expecting a $5,000 tax credit attributed to operations outside of the electronic division.Second-quarter pretax income for the non-electronics operations was $40,000.As of the end of the second quarter, annual pretax income of $225,000 was anticipated for continuing operations.
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Required:
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In good form, prepare a schedule showing the income (loss) and tax expense (benefit) determination for the first quarter, the restated first quarter, and the second quarter.

Futura Corporation Reported Pretax Net Income of $30,000 in the First