Canton Corporation reported the following items in its adjusted trial balance for the year ended December 31, 2011: Income from continuing operations before income taxes $110,000 Extraordinary gain on property condemnsation 28,000 Extraordinary loss on natural disaster (50,000) Canton is subject to a 30% tax rate. Required: Prepare the December 31, 2011, income statement for Canton Corporation, starting with income from continuing operations before income taxes. Solution Carton Corporation Income Statement For the year ended Dec31 2011 .

1. Canton Corporation reported the following items in its adjusted trial balance for the
year ended December 31, 2011:
Income from continuing operations before income taxes $110,000
Extraordinary gain on property condemnsation 28,000
Extraordinary loss on natural disaster (50,000)
Canton is subject to a 30% tax rate.
Required: Prepare the December 31, 2011, income statement for Canton Corporation,
starting with income from continuing operations before income taxes.
Solution
Carton Corporation
Income Statement
For the year ended Dec31 2011
Amount($)
Income From Continuing Operation before Taxes 110,000
Add: Extraordinary gain on Property Condemnsation 28,000
Less: Extraordinary loss on Natural disaster 50,000
Net Income 88,000
Less: Taxes(30%) 26,400
Income After Taxes 61,600