Chance Company had two operating divisions, one manufacturing farm e other office supplies. Both divisions are considered separate component generally accepted accounting principles. The farm equipment compone unprofitable, and on September 1, 2021, the company adopted a plan to : division. The actual sale was completed on December 15, 2021, at a price book value of the division's assets was $1,190,000, resulting in a before-t on the sale. The division incurred a before-tax operating loss from operations of $120 beginning of the year through December 15. The income tax rate is 25%. income from its continuing operations is $640,000. Dauiu

Chance Company had two operating divisions, one manufacturing farm e other office supplies. Both divisions are considered separate component generally accepted accounting principles. The farm equipment compone unprofitable, and on September 1, 2021, the company adopted a plan to : division. The actual sale was completed on December 15, 2021, at a price book value of the division's assets was $1,190,000, resulting in a before-t on the sale. The division incurred a before-tax operating loss from operations of $120 beginning of the year through December 15. The income tax rate is 25%. income from its continuing operations is $640,000. Dauiu

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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2.On Feb, 1, Johnson Co. agreed to sell the assets of its Formal Wear Division to Sun Hat Inc. The following additional facts pertain to the transaction: The Formal Wear Division qualifies as a component of the entity according to GAAP regarding discontinued operations. The book value of Formal Wear's assets totaled $48 million on December 31, 2021. Formal Wear's operating income was a pre-tax loss of $10 million in 2021. Tango's income tax rate is 25%. Suppose that the Formal Wear Division's assets had not been sold by December 31, 2021, but were considered held for sale. Assume that the fair value of these assets was $40 million at December 31, 2021. In the income statement for the year ended December 31, 2021, Tango Co. would report discontinued operations of: A) $7.5 million loss. B) $10.0 million loss. C) $18 million loss. D) $13.5 million loss. .
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am. 105.
Esquire Comic Book Company had income before tax of $1,250,000 in 2024 before considering the following material items: 1. Esquire sold one of its operating divisions, which qualified as a separate component according to generally accepted accountin principles. The before-tax loss on disposal was $365,000. The division generated before-tax income from operations from the beginning of the year through disposal of $550,000. 2. The company incurred restructuring costs of $80,000 during the year. Required: Prepare the income statement for Esquire beginning with income from continuing operations. Assume an income tax rate of 25% Ignore EPS disclosures. Note: Amounts to be deducted should be indicated with a minus sign. ESQUIRE COMIC BOOK COMPANY Partial Income Statement For the Year Ended December 31, 2024 Income from continuing operations Discontinued operations. Gain on sale of assets Income from operations of discontinued component Income tax benefit. Income tax expense
During the current year, a company properly classified as held for sale and then disposed of a component in a strategic shift. The carrying amount of the component was $820,000 at the time of its classification as held for sale, and no loss was recognized for a write-down to fair value minus cost to sell. Its fair value minus cost to sell at all relevant times was $900,000. The assets were actually sold for $600,000. The company should recognize a loss on disposal equal to A. Extraordinary loss of $220,000. $220,000. $300,000. $820,000. O B. C. D. + Previous Directions: Select the best answer. Mark Review Items Copyright | Privacy Policy | Employment 53 seconds Next->
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Munabhai
A company which prepares financial statements to 31 December classifies a non-current asset as held for sale on 1 SEPTEMBER 20X2. The asset's carrying amount at that date is $20,000 and its fair value is $15,600, with estimated costs to sell of $600. The asset is sold in June 20X3 for $16,000(net of costs). Calculate any impairment losses or gains that should be recognised in the company's statement of profit or loss for the year ended 31 December 20X2 if the asset's fair value less costs to sell at 31 December 20X2 is: a)14,000 b)17,000 c)22,000 In each case, also calculate the profit or loss that should be recognised on the disposal of the asset in 20X3 and comment on the results shown.