Eaton, Inc.disposes of an unprofitable segment of its business.The operation of the segment suffered a $360,000 loss in the year of disposal.The loss on disposal of the segment was $180,000.If the tax rate is 30%, and income before income taxes was $2,250,000,

Question

Quizplus · Accepted Answer

The income from continuing operations is calculated as income before income taxes minus the tax expense on that income. The tax expense is $2,250,000 * 30% = $675,000. Therefore, the income from continuing operations is $2,250,000 - $675,000 = $1,575,000.