Reference no: EM132727027

Problem 1: Howard Co.'s 2018 income from continuing operations before income taxes was $297,000. Howard Co. reported before-tax income on discontinued operations of $57,000. All tax items are subject to a 40% tax rate. In its income statement for 2018, Howard Co. would show the following line-item amounts for income tax expense and net income:

Multiple Choice

Option 1: $240,000 and $274,200 respectively.

Option 2: $354,000 and $319,800 respectively.

Option 3: $118,800 and $212,400 respectively.

Option 4: $212,400 and $118,800 respectively.