The income statement of Jones Company for the year ended December 31, 2012, shows:
Sales
$1,800,000
Cost of good sold
1,200,000
Gross profit
$ 600,000
Operating expenses
(200,000)
Equity earnings of nonconsolidated subsidiaries
30,000
Operating income before income taxes
$ 430,000
Taxes related to operations
(130,000)
Net income from operations before cumulative effect of change in
accounting principle
$ 300,000
Cumulative effect of change in accounting principle (less applicable
income taxes of $30,000)
60,000
Net income
$ 360,000
Required:
a.
Compute the net earnings after removing nonrecurring items.
b.
Determine the earnings from the nonconsolidated subsidiary.
c.
Determine the total tax amount.
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