Selected account balances from the adjusted trial balance forOlinda Corporation as of its calendar year-end December 31follow.
| | Debit | Credit |
| a. | Interest revenue | | | | $ | 14,000 | |
| b. | Depreciation expense—Equipment | $ | 34,000 | | | | |
| c. | Loss on sale of equipment | | 25,850 | | | | |
| d. | Accounts payable | | | | | 44,000 | |
| e. | Other operating expenses | | 106,400 | | | | |
| f. | Accumulated depreciation—Equipment | | | | | 71,600 | |
| g. | Gain from settlement of lawsuit | | | | | 44,000 | |
| h. | Accumulated depreciation—Buildings | | | | | 174,500 | |
| i. | Loss from operating a discontinued segment (pretax) | | 18,250 | | | | |
| j. | Gain on insurance recovery of tornado damage | | | | | 20,000 | |
| k. | Net sales | | | | | 998,000 | |
| l. | Depreciation expense—Buildings | | 52,000 | | | | |
| m. | Correction of overstatement of prior year’s sales (pretax) | | 16,000 | | | | |
| n. | Gain on sale of discontinued segment’s assets (pretax) | | | | | 34,000 | |
| o. | Loss from settlement of lawsuit | | 23,250 | | | | |
| p. | Income tax expense | | ? | | | | |
| q. | Cost of goods sold | | 482,500 | | | | |
|
2a. What is the amount of income fromcontinuing operations before income taxes?
2b. What is the amount of the income taxexpense?
2c. What is the amount of income from continuingoperations?
Assume that the company’s income tax rate is 30% for allitems.
