Question Details

Compute the net earnings after removing nonrecurring items



The income statement of Jones Company for the year ended December 31, 2010, shows:

Sales	$1,800,000 
Cost of goods sold	 1,200,000 
Gross profit	 $  600,000 
Operating expenses	  (200,000)
Equity earnings of nonconsolidated subsidiaries	    30,000 
Operating income before income taxes	 $  430,000 
Taxes related to operations	  (130,000)
Net income from operations before cumulative effect of change in accounting 	principle	 $  300,000 
Cumulative effect of change in accounting principle (less applicable income
   taxes of $30,000)	    60,000 
Net income	$  360,000 

Required:
a.	Compute the net earnings after removing nonrecurring items.
b.	Determine the earnings from the nonconsolidated subsidiary.
c.	Determine the total tax amount.





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