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Douglas Corporation 550000

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For its fiscal year ending October 31, 2014, Douglas Corporation reports the following
partial data shown below.

Income before income taxes   550,000
Income tax expense (30% x $410,000)   123,000
Income before extraordinary items   427,000
Extraordinary loss from flood   140,000
Net income   287,000

The flood loss is considered an extraordinary item. The income tax rate is 30% on all items.

Prepare a correct income statement, beginning with income before income taxes.

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