Ivy Group reported income from continuing operations before taxes of $648,000 and income from discontinued operations of $224,000. Ivy also reported $78,000 of unrealized gains from available-for-sale debt investments (fair value accounting adjustments) recorded as other comprehensive income. The company is subject to a 28% tax rate and reports no permanent differences. How much income tax expense does Ivy report as a line item directly below "Income from Continuing Operations before Taxes"?

Question

Quizplus · Accepted Answer

The income tax expense is calculated on the income from continuing operations before taxes. Therefore, $648,000 * 28% = $181,440.

Ivy Group Reported Income from Continuing Operations Before Taxes of $648,000