Assume that by December 31, 2020, the segment had not yet been sold but was considered held for sale. The fair value of the segment's assets on December 31 was P1,250,000. The post-tax loss from discontinued operations for 2020, based on the above data, should be:
Assume that by December 31, 2020, the segment had not yet been sold but was considered held for sale. The fair value of the segment's assets on December 31 was P1,250,000. The post-tax loss from discontinued operations for 2020, based on the above data, should be:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![Presented below are the condensed income statement of Vital Corporation for the years
ended December 31, 2020 and 2019:
2020
2019
5,000,000
3,350,000
1,650,000
675,000
975,000
200,000
1,175,000
411,250
763,750
Sales
4,900,000
3.300,000
1,600,000
650,000
950,000
Cost of goods sold
Gross income
Operating expenses
Operating income
Gain on sale of division
Net income before income tax
Income tax expense (35%)
Net income
950,000
332,500
617.500
On October 10, 2020, Chalangs entered into an agreement to sell the assets of one of its
geographical segments. The geographical segment comprises operations and cash flows
that can be clearly distinguished, operationally and for financial reporting purposes, from
the rest of the company. The segment was sold on December 31, 2020, for P1,750,000.
The book value of the segment's assets was P1,550,000. The segment's contribution to
Chalangs' operating income before tax for each year was as follows:
2020
113,750 loss
81,250 income
2019
Assume that by December 31, 2020, the segment had not yet been sold but was
considered held for sale. The fair value of the segment's assets on December 31 was
P1,250,000. The post-tax loss from discontinued operations for 2020, based on the
above data, should be:](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6047ebe5-fd3f-412b-9daf-575743a64f2f%2F7c459539-f0ec-46f0-b582-ceb694a7080d%2Fs7mfik_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Presented below are the condensed income statement of Vital Corporation for the years
ended December 31, 2020 and 2019:
2020
2019
5,000,000
3,350,000
1,650,000
675,000
975,000
200,000
1,175,000
411,250
763,750
Sales
4,900,000
3.300,000
1,600,000
650,000
950,000
Cost of goods sold
Gross income
Operating expenses
Operating income
Gain on sale of division
Net income before income tax
Income tax expense (35%)
Net income
950,000
332,500
617.500
On October 10, 2020, Chalangs entered into an agreement to sell the assets of one of its
geographical segments. The geographical segment comprises operations and cash flows
that can be clearly distinguished, operationally and for financial reporting purposes, from
the rest of the company. The segment was sold on December 31, 2020, for P1,750,000.
The book value of the segment's assets was P1,550,000. The segment's contribution to
Chalangs' operating income before tax for each year was as follows:
2020
113,750 loss
81,250 income
2019
Assume that by December 31, 2020, the segment had not yet been sold but was
considered held for sale. The fair value of the segment's assets on December 31 was
P1,250,000. The post-tax loss from discontinued operations for 2020, based on the
above data, should be:
![The statement of changes in equity of Corinthian Corp. shows the following balances as of January 1,
2021:
Ordinary share capital (P5 par, 250,000 shares authorized, 137,500 issued and
outstanding)
Share premium
Unappropriated retained earnings
Appropriated retained earnings
Total equity
The corporation had the following equity transactions for during 2021:
Jan 15 Completed the building renovation for which 250,000 of retained earnings had been
P 687,500
275,000
667,500
250.000
P1880.000
restricted. Paid the contractor P242,500, all of which is capitalized.
Mar 3 Issued 50,000 additional ordinary shares for P8.00 per share.
May 18 Declared a dividend of P1.50 per share to be paid on July 31, 2021, to shareholders of
record on June 30, 2021.
June 19 Approved additional building renovation to be funded internally. The estimated cost of the
project is P200,000, and retained earnings are to be restricted for that amount.
July 31 Paid the cash dividend.
Dec 31 Declared a property dividend to be paid on January 10, 2022, to shareholders of record on
January 5, 2022. The dividend is to consist of equipment with a carrying value of P150,000.
The equipment's fair value at December 31, 2021 is P157,500.
31 Reported P442,500 of net income on December 31, 2021 income statement.
Required: Compute for the total equity to shown in the 2021 Statement of Changes in Equity and
subsequently carried forward to the Statement of Financial Position.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6047ebe5-fd3f-412b-9daf-575743a64f2f%2F7c459539-f0ec-46f0-b582-ceb694a7080d%2Ffgmra05_processed.jpeg&w=3840&q=75)
Transcribed Image Text:The statement of changes in equity of Corinthian Corp. shows the following balances as of January 1,
2021:
Ordinary share capital (P5 par, 250,000 shares authorized, 137,500 issued and
outstanding)
Share premium
Unappropriated retained earnings
Appropriated retained earnings
Total equity
The corporation had the following equity transactions for during 2021:
Jan 15 Completed the building renovation for which 250,000 of retained earnings had been
P 687,500
275,000
667,500
250.000
P1880.000
restricted. Paid the contractor P242,500, all of which is capitalized.
Mar 3 Issued 50,000 additional ordinary shares for P8.00 per share.
May 18 Declared a dividend of P1.50 per share to be paid on July 31, 2021, to shareholders of
record on June 30, 2021.
June 19 Approved additional building renovation to be funded internally. The estimated cost of the
project is P200,000, and retained earnings are to be restricted for that amount.
July 31 Paid the cash dividend.
Dec 31 Declared a property dividend to be paid on January 10, 2022, to shareholders of record on
January 5, 2022. The dividend is to consist of equipment with a carrying value of P150,000.
The equipment's fair value at December 31, 2021 is P157,500.
31 Reported P442,500 of net income on December 31, 2021 income statement.
Required: Compute for the total equity to shown in the 2021 Statement of Changes in Equity and
subsequently carried forward to the Statement of Financial Position.
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