Financial Statement Analysis

For its fiscal year ending October 31, 2020, Haas Corporation reports the following partial data shown below.

The loss on discontinued operations comprised a $50,000 loss from operations and a $70,000 loss from disposal. The income tax rate is 20% on all items.

Instructions

1. Prepare a correct statement of comprehensive income beginning with income before income taxes.
2. Explain in memo form why the income statement data are misleading.

Solution