Southeast Airlines had pretax earnings of $65 million, including a gain on disposal of a discontinued operation of $10 million. The company’s tax rate is 40%. What is the amount of income tax expense that Southeast should report in its income statement? How should the gain on disposal of a discontinued operation be reported?

Principles of Accounting Volume 1
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ISBN:9781947172685
Author:OpenStax
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Chapter14: Corporation Accounting
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Problem 20EB: Trumpet and Trombone Manufacturing, Inc. began the year with a retained earnings balance of...
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Southeast Airlines had pretax earnings of $65 million, including a gain on disposal of a discontinued operation of $10 million. The company’s tax rate is 40%. What is the amount of income tax expense that Southeast should report in its income statement? How should the gain on disposal of a discontinued operation be reported?

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