Business, 21.06.2021 16:50 confi92841

Kingbird Inc. reported income from continuing operations before taxes during 2020 of $818,700. Additional transactions occurring in 2020 but not considered in the $818,700 are as follows. 1. The corporation experienced an uninsured flood loss in the amount of $96,000 during the year.
2. At the beginning of 2018, the corporation purchased a machine for $61,200 (salvage value of $10,200) that had a useful life of 6 years. The bookkeeper used straight-line depreciation for 2018, 2019, and 2020, but failed to deduct the salvage value in computing the depreciation base.
3. Sale of securities held as a part of its portfolio resulted in a loss of $59,800 (pretax).
4. When its president died, the corporation realized $159,100 from an insurance policy. The cash surrender value of this policy had been carried on the books as an investment in the amount of $44,310 (the gain is nontaxable).
5. The corporation disposed of its recreational division at a loss of $104,330 before taxes. Assume that this transaction meets the criteria for discontinued operations.
6. The corporation decided to change its method of inventory pricing from average-cost to the FIFO method. The effect of this change on prior years is to increase 2018 income by $58,150 and decrease 2019 income by $19,670 before taxes. The FIFO method has been used for 2020. The tax rate on these items is 30%.

Required:
Prepare an income statement for the year 2020 starting with income from continuing operations before taxes.

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Kingbird Inc. reported income from continuing operations before taxes during 2020 of $818,700. Addit...

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