39. Arreaga Corp. has a tax rate of 40 percent and income before non-operating items of $1,392,000. It also has the foll

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39. Arreaga Corp. has a tax rate of 40 percent and income before
non-operating items of $1,392,000. It also has the following items
(gross amounts).
Unusual loss $222,000
Discontinued operations loss 606,000
Gain on disposal of equipment 48,000
Change in accounting principle
increasing prior year's income 318,000
What is the amount of income tax expense Arreaga would report on
its income statement?
a. $556,800
b. $487,200
c. $595,200
d. $372,000
41. Lantos Company had a 40 percent tax rate. Given the
following pre-tax amounts, what would be the income tax expense
reported on the face of the income statement?
Sales revenue $ 1,000,000
Cost of goods sold 600,000
Salaries and wages expense 80,000
Depreciation expense 110,000
Dividend revenue 90,000
Utilities expense 10,000
Discontinued operations loss 100,000
Interest expense 20,000
a. $108,000
b. $68,000
c. $72,000
d. $32,000