5. Zebra Company is a diversified entity with nationwide interests in commercial real estate development, banking, mining, and food distribution. The food distribution division was deemed to be inconsistent with the long-term direction of the entity. On October 1, 2011, the board of directors voted to approve the disposal of this division. The sale is expected to occur in August 2012. The food distribution had the following revenue and expenses in 2011: January 1 to September 30, revenue of P35,000,000 and expenses of P27,000,000; October 1 to December 31, revenue of P15,000,000 and expenses of P10,000,000. The carrying amount of the division's assets at December 31, 2011 was P56,000,000 and the fair value less cost to sell was P56,500,000. The sale contract requires Zebra to terminate certain employees incurring an expected termination cost of P4,000,000 to be paid b December 15, 2012. Income tax rate is 30%. 11 the income statement for the year ended December 31, 2011, what amount should be reported as income from discontinued operation?

5. Zebra Company is a diversified entity with nationwide interests in commercial real estate development, banking, mining, and food distribution. The food distribution division was deemed to be inconsistent with the long-term direction of the entity. On October 1, 2011, the board of directors voted to approve the disposal of this division. The sale is expected to occur in August 2012. The food distribution had the following revenue and expenses in 2011: January 1 to September 30, revenue of P35,000,000 and expenses of P27,000,000; October 1 to December 31, revenue of P15,000,000 and expenses of P10,000,000. The carrying amount of the division's assets at December 31, 2011 was P56,000,000 and the fair value less cost to sell was P56,500,000. The sale contract requires Zebra to terminate certain employees incurring an expected termination cost of P4,000,000 to be paid b December 15, 2012. Income tax rate is 30%. 11 the income statement for the year ended December 31, 2011, what amount should be reported as income from discontinued operation?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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