Acc280 Financial Accounting: E15-12 For its fiscal year ending October 31, 2008, Molini Corporation

Acc280 Financial Accounting 
E15-12 
For its fiscal year ending October 31, 2008, Molini Corporation reports the following partial data. 
Income before income taxes 540,000 
Income tax expense (30% $390,000) 117,000 
Income before extraordinary items 423,000 
Extraordinary loss from flood 150,000 
Net income 273,000 

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

Instructions 
a. Complete the correct income statement, beginning with income before income taxes. 
b. Explain in memo form why the income statement data are misleading
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