Futura Corporation Reported Pretax Net Income of $30,000 in the First

question 37

Essay

Futura Corporation reported pretax net income of $30,000 in the first quarter of 20X1. The company anticipated pretax net income of $90,000 for the year. During the second quarter, after issuing the first-quarter interim statement, Futura decided to discontinue its electronics division and adopted a formal plan for its disposal.
During the first quarter, the electronics division reported a pretax loss of $70,000 and estimated a $270,000 operating loss for the year. During the second quarter, the division experienced an operating loss of $35,000 prior to the measurement date and $8,000 in the remainder of that quarter. The anticipated loss on the disposal of that division's assets was $40,000.
Futura had a flat 25% tax rate for 20X1. The firm is expecting a $5,000 tax credit attributed to operations outside of the electronic division. Second-quarter pretax income for the non-electronics operations was $40,000. As of the end of the second quarter, annual pretax income of $225,000 was anticipated for continuing operations.
Required:
In good form, prepare a schedule showing the income (loss) and tax expense (benefit) determination for the first quarter, the restated first quarter, and the second quarter.

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Definitions:

External Recruiting

Is the process of looking to sources outside the organization for prospective employees.

Job Posting

Is a mechanism for internal recruiting in which vacancies in the organization are publicized through various media such as company newsletters, bulletin boards, internal memos, and the firm’s intranet.

Assessment Center

A methodology used in the selection process involving a series of tests, exercises, and interviews to evaluate candidates' suitability for specific roles or promotions.

Current Managers

Individuals who presently hold managerial positions within an organization, overseeing and making decisions on personnel and operations.