The semiconductor business of the California Microtech Corporation qualifies as a component of the entity according to GAAP.. The book value of the assets of the segment was $17 million. The loss from operations of the segment during 2021 was $3.20 million. Pretax income from continuing operations for the year totaled $6.00 million. The income tax rate is 25% %. Assume instead that the estimated fair value of the segment's assets, less costs to sell, on December 31 was $15 million rather than $17 million. Prepare the lower portion of the 2021 income statement beginning with income from continuing operations before income taxes. Ignore EPS disclosures. (Amounts to be deducted and negative amounts should be indicated with a minus sign. Enter your answers in whole dollars and not in millions.) Answer is complete but not entirely correct. CALIFORNIA MICROTECH CORPORATION Partial Income Statement For the Year Ended December 31, 2021 Income from continuing operations before income taxes Income tax expense Income from continuing operations Discontinued operations: Loss from operations of discontinued component Income tax benefit Loss on discontinued operations Net income (loss) $ 6,000,000 (1,500,000) $ 4,500,000 (3,200,000) 800,000 (2,400,000) X $ 2,100,000

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Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.