In 2010, the Damon Company had sales of $600, 000; cost of sales of $430, 000; interest expense of $12, 000; a gain on the sale of a component of $12, 000; and an extraordinary loss of $20, 000.For its income statement, Damon uses the single-step format and the all-inclusive concept.What was Damon's reported pretax income from continuing operations?

Question

Quizplus · Accepted Answer

To calculate pretax income from continuing operations, we need to add net sales, gain on sale of component, and other income and then subtract cost of goods sold, operating expenses, interest expense, and other expenses. 
Pretax income from continuing operations = ($600,000 + $12,000 + $0) - ($430,000 + $0 + $0 + $0 + $12,000 + $0 + $0 + $0 + $0 + $0 + $0 + $0 + $0) 
= $612,000 - $442,000 
= $170,000 
Therefore, the correct answer is C) $158,000.

In 2010, the Damon Company Had Sales of $600, 000;