The income statement of Tawls Company for the year ended December 31, 2008, shows the following:
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Revenue from sales
|
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$ 980,000
|
|
Cost of products sold
|
|
510,000
|
|
Gross profit Operating expenses: Selling expenses
|
$110,000
|
470,000
|
|
General expenses
|
140,000
|
250,000
|
|
Operating income
|
|
220,000
|
|
Equity on earnings of nonconsolidated subsidiary
|
|
60,000
|
|
Operating income before income taxes
|
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280,000
|
|
Taxes related to operations
|
|
100,000
|
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Net income from operations Extraordinary loss from flood (less applicable taxes of $50,000)
|
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180,000
(120,000)
|
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Minority share of earnings
|
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(40,000)
|
|
Net income
|
|
$20,000
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Required:
a. Compute the net earnings remaining after removing nonrecurring items.
b. Determine the earnings from the nonconsolidated subsidiary.
c. For the subsidiary that was not consolidated, what amount of income would have been included if this subsidiary had been consolidated?
d. What earnings relate to minority shareholders of a subsidiary that was consolidated?
e. Determine the total tax amount.