Churchill Chocolates owns and operates polar bear-themed chocolate stores in separate geographical areas throughout Manitoba. Due to the negative economic effects of the coronavirus pandemic, Churchill Chocolates decided to sell its store in Portage la Prairie on October 31, 2020. The Portage la Prairie store suffered a loss of $250,000 in 2020, which included $200,000 from January 1 to October 31, 2020. At Churchill Chocolates’ year-end (December 31, 2020), the carrying (book) value of the Portage la Prairie assets is $6,300,000 and the fair value is $6,000,000. MNP has been appointed to assist with this sale. They have estimated the costs to sell the Portage la Prairie store at $275,000. The provincial and federal tax rates are a combined 20%. The store has not sold as at December 31, 2020. Required Assume the Portage la Prairie store qualifies for reporting as a discontinued operation. In the discontinued operations section of Churchill Chocolates’ 2020 income statement, what amount should be reported ?
Churchill Chocolates owns and operates polar bear-themed chocolate stores in separate geographical areas throughout Manitoba. Due to the negative economic effects of the coronavirus pandemic, Churchill Chocolates decided to sell its store in Portage la Prairie on October 31, 2020. The Portage la Prairie store suffered a loss of $250,000 in 2020, which included $200,000 from January 1 to October 31, 2020. At Churchill Chocolates’ year-end (December 31, 2020), the carrying (book) value of the Portage la Prairie assets is $6,300,000 and the fair value is $6,000,000. MNP has been appointed to assist with this sale. They have estimated the costs to sell the Portage la Prairie store at $275,000. The provincial and federal tax rates are a combined 20%. The store has not sold as at December 31, 2020. Required Assume the Portage la Prairie store qualifies for reporting as a discontinued operation. In the discontinued operations section of Churchill Chocolates’ 2020 income statement, what amount should be reported ?
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