Provide answer During 2011, Comet Cares, Inc. decided to sell an unprofitable segment of itsbusiness. The sale of this segment qualifies as a discontinued operation forfinancial reporting purposes. However, at the end of 2011, Comet had yet tosell the segment. On December 31, 2011, the segment assets had a fair valueminus anticipated costs to sell of $3,500,000 and a book value of $3,700,000.For the year, the segment reported an operating loss of $500,000. In January of2012, Comet Cares sold the segment for $3,600,000. Operating losses in thefirst month of 2012 amounted to $45,000. Assume a 40% tax rate in both 2011and 2012.a. What is the after-tax dollar value impact of the discontinued operation on2011?b. What is the after-tax dollar value impact of the discontinued operation on2012?

Step 1: Definition of After-Tax Impact of Discontinued OperationsDiscontinued operations refer to…

Answered: During 2011, Comet Cares, Inc. decided…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Booker Company committed to sell the comic book division, a component of the business, on September 1, 2020. The carrying amount of the division was P4,000,000 and the fair value was P3,500,000. The disposal date is expected on June 1, 2021, The division reported an operating loss of P200,000 for the year ended December 31, 2020. What amount should be reported as pretax loss from discontinued operation in 2020? a.500,000b.200,000c.700,000d.0
Tracy Ltd. purchased a piece of equipment on January 1, 2016, for $1,260,000. At that time, it was estimated that the machine would have a 15-year life and no residual value. On December 31, 2020, Tracy’s controller found that the entry for depreciation expense was omitted in error in 2017. In addition, Tracy planned to switch to double-declining-balance depreciation because of a change in the pattern of benefits received, starting with the year 2020. Tracy currently uses the straight-line method for depreciating equipment. Prepare the general journal entries, if any, the accountant should make at December 31, 2020. (Ignore tax effects.) (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round the rate of deprecition under double decling balance method to 5 decimal places, ie. 13.33333%. Round answers to 0 decimal places, e.g. 5,125.)…
On January 2, 2017, BTS Company purchased equipment costing P1,500,000. The estimated useful life of the equipment is 8 years with est. residual value of P50,000. The company is using straight-line method of depreciation. On July 1, 2020, BTS decided to replace this equipment with a more technologically advance model. Thus, the old equipment will be held for sale. The Fair value less costs to sell of the old equipment as of this date is determined to be P800,000. On December 31, 2020, the fair value less costs to sell of the held for sale equipment amounts to P900,000. On July 1, 2021, the equipment held for sale was sold for P750,000. Required: Entries on July 1, 2020 and December 31, 2020 Entry to record the sale on July 1, 2021
On December 31, 2021, Max Company committed to a plan to discontinue the operations of Underwear Division. The fair value of the facilities was P1,000,000 less than carrying amount on December 31, 2021. The division's operating loss for 2021 was P2,000,000 and the division was actually sold for P1,200,000 less than the carrying amount in 2022. The entity estimated that the division's operating loss for 2022 would be P500,000, The income tax rate is 30% What amount should be reported as loss from discontinued operation in 2021?
On June 30, 2020, ACME Incorporated decided to sell a storage facility that was no longer suitable for the company's operations. The following information was taken from the accounting records at January 01, 2020: Acquisition date: January 2, 2000 Acquisition cost: $800,000 Useful life: 40 years Residual value: $0 Accumulated depreciation: $400,000 Management has an authorized plan in place to sell the facility and, all criteria for classification as held for sale are met. The building's estimated fair value is $360,000 and expected sales commissions are 10% of the sales price. At December 31 (year end) the fair value was unchanged and the sale had not been completed. Required: (a) Prepare all required journal entries for June 30. Round final answers to the nearest dollar and show calculations below the journal entry. (b) How will the building be classified assuming ACME reports under IFRS? (c) How will the building be classified assuming ACME reports under ASPE?
During 2023, Door Inc. decided to dispose of Bell Division, which is considered a separate reporting segment. Door estimates it can sell Bell at a loss of $30,000, and does so on May 1, 2023. Bell's operating income from January 1 to April 30 was $23,000. Ignoring income taxes, and assuming statements are prepared under ASPE, the discontinued operations section of Door's income statement for the year ended December 31, 2023 should report only the income from Door's other divisions. Since it no longer owns Bell at December 31, Door does not need to report anything relating to Bell's operations during the year. the $23,000 operating income and the $30,000 loss in the body of the income statement. the $23,000 operating income and the $30,000 loss in the discontinued operations section of the income statement. the $23,000 operating income in the body of the income statement and the $30,000 loss in the discontinued operations section of the income statement.
Cullumber Ltd. purchased equipment on January 1, 2015 at a cost of $188,390. The equipment has an estimated useful life of 10 years and a residual value of $9,860. Cullumber realized that there was a declining demand for the product being produced by the equipment. Given this indicator of possible impairment, management determined that the recoverable amount of the asset on December 31, 2018 was $111,830. The company uses the straight-line method of depreciation. Record the impairment loss, if any, on December 31, 2018. Date Account Titles and Explanation Debit Credit Dec. 31
On June 30, 2022, L Company classified a non-current asset as “Held for Sale.” On this date, before its reclassification, its carrying amount was P5,000,000 and its expected selling price was P4,500,000, with expected cost to sell of P300,000. By December 31, 2022, the asset had not yet been sold, but the management is still committed to a plan to sell it, and the sale is considered to be highly probable. The entity estimated that because of recent changes for the demand of the product that is produced by the asset and expected favorable price movement, the asset was now expected to be selling at P5,500,000 with related cost to sell unchanged. Depreciation from July 1 to December 31 would have been P500,000. What amount of gain shall be recognized at December 31, 2022 as a result of the increase in the fair value less cost to sell of the asset?
Please solve this.
In 2015, Winnebago Industries recorded an impairment loss of $462,000 on its corporate plane. Assume that the plane originally cost the company $2,350,000 and had accumulated depreciation of $1,598,000 at the time of the impairment charge. What was the plane’s fair value at the end of 2015? Show you calculation.
During 2020, SBD closed facilities which were made redundant by the acquisition of Niscayah. Assume that they recognized a charge of $125 associated with closures during 2020 of which $50 was for severance and other benefits to be paid to employees during 2021 and 2022 (the employees were terminated in 2020) and $75 million was for impairment of the property, plant and equipment. $40 of the severance was paid in 2021, with the remainder to be paid in 2022. What journal entries would SBD have recorded in 2020 and 2021?
Van Frank Telecommunications has a patent on a cellular transmission process. The company has amortized the $18 million cost of the patent on a straight-line basis since it was acquired at the beginning of 2012. Due to rapid technological advances in the industry, management decided that the patent would benefit the company over a total of six years rather than the nine-year life being used to amortize its cost. The decision was made at the end of 2016 (before adjusting and closing entries). What is the appropriate adjusting entry for patent amortization in 2016 to reflect the revised estimate?

SEE MORE QUESTIONS

Recommended textbooks for you

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…

Accounting

ISBN:

9780134475585

Author:

Srikant M. Datar, Madhav V. Rajan

Publisher:

PEARSON

Intermediate Accounting

Accounting

ISBN:

9781259722660

Author:

J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher:

McGraw-Hill Education

Financial and Managerial Accounting

Accounting

ISBN:

9781259726705

Author:

John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS