Income statement - Income Statement

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Income Statement The income statement of a corporation includes the same types of revenues and expenses as companies  organized as sole proprietors and partnerships with one difference. A corporation is a legal entity and  therefore, it must pay taxes. The expense for federal and state income taxes is shown on the income statement  after other income/(expense), net (the non-operating income and expenses) as follows: Operating income $92,500 Other income/(expense), net Interest revenue 5,000 Loss on sale of equipment (2,400) Interest expense (8,000) Income before taxes 87,100 Income tax expense 33,098 Net income $54,002 Some companies report additional items after income tax expense on their income statements. These items  represent special items outside of normal business operations. They are shown separately to ensure users can  identify what income from continuing business results will be. If any special items are included on the income  statement, the income tax expense or savings related to each item is net against the special item to report it  after taxes. These additional special items may be one of three types: discontinued operations, extraordinary  items, and changes in accounting principles. Discontinued operations
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This note was uploaded on 02/04/2011 for the course FINANCE 101 taught by Professor Eagen during the Spring '11 term at SUNY Buffalo.

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Income statement - Income Statement

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