ACC 280 / XACC 280
Axia College of University of Phoenix (UoP)
Principles of Accounting
Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2008). Financial Accounting (6th ed.). Hoboken, NJ: Wiley.
ACC 280 / XACC 280 Solution
Help in ACC 280
Help in XACC 280
Exercise 15-12 (E15-12) For its fiscal year ending October 31, 2008, Molini Corporation reports the following partial data.
Income before income taxes $540,000
Income tax expense (30% x $390,000) 117,000
Income before extraordinary items 423,000
Extraordinary loss from flood 150,000
Net income $273,000
The flood loss is considered an extraordinary item. The income tax rate is 30% on all items.
Instructions
(a) Prepare a correct income statement, beginning with income before income taxes.
(b) Explain in memo form why the income statement data are misleading.
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