In 2014, Dallas 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 $52,000; and an extraordinary loss of $25,000. For its income statement, Dallas uses the single-step format and the all-inclusive concept. What was Dallas's reported pretax income from continuing operations?

Question

Quizplus · Accepted Answer

To calculate the pretax income from continuing operations, we need to subtract cost of sales, interest expense, and extraordinary loss from sales, but add the gain on the sale of a component. 
Pretax income from continuing operations = Sales - Cost of sales - Interest expense - Extraordinary loss + Gain on sale of a component
= $600,000 - $430,000 - $12,000 - $25,000 + $52,000 
= $158,000 
Therefore, the correct answer is C. $158,000.

In 2014, Dallas Company Had Sales of $600,000; Cost of Sales