The following information relates to the Kill Devil Hills Company for the year ending December 31, 2014:
* Of this amount $5,500 relates to extraordinary items; $4,800 relates to the pretax income from the operations of discontinued division; pretax loss on the disposal of division resulted in a tax savings of $13,350; and pretax correction of the depreciation error resulted in a tax savings of $1,500.
Required:
1) Prepare the year end journal entry necessary to record the 2014 intraperiod income tax allocation.
2) Prepare Kill Devil Hill's 2014 income statement and statement of retained earnings.

Question

The following information relates to the Kill Devil Hills Company for the year ending December 31, 2014:  
* Of this amount $5,500 relates to extraordinary items; $4,800 relates to the pretax income from the operations of discontinued division; pretax loss on the disposal of division resulted in a tax savings of $13,350; and pretax correction of the depreciation error resulted in a tax savings of $1,500.
Required:
1) Prepare the year end journal entry necessary to record the 2014 intraperiod income tax allocation.
2) Prepare Kill Devil Hill's 2014 income statement and statement of retained earnings.

Quizplus · Accepted Answer

The Answer of The following information relates to the Kill Devil Hills Company for the year ending December 31, 2014:  
* Of this amount $5,500 relates to extraordinary items; $4,800 relates to the pretax income from the operations of discontinued division; pretax loss on the disposal of division resulted in a tax savings of $13,350; and pretax correction of the depreciation error resulted in a tax savings of $1,500.
Required:
1) Prepare the year end journal entry necessary to record the 2014 intraperiod income tax allocation.
2) Prepare Kill Devil Hill's 2014 income statement and statement of retained earnings.

The Following Information Relates to the Kill Devil Hills Company