ACCOUNTING
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% $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 Molini's reported income statement data are incorrect
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