During December 2016, Smythe Company decides to sell Division F (a component of the company). On December 31, 2016, the company classifies Division F as held for sale. On that date, the book values of Division F's assets and liabilities are $950,000 and $600,000, respectively. Smythe expects to sell Division F in 2017 and estimates that the fair value of Division F is $250,000. During 2016, Division F earned revenues of $1,000,000 and incurred expenses of $1,300,000. Smythe is subject to a 30% income tax rate. Required: 1. Compute the following for Division F of Smythe Company: a) Pretax income or loss from discontinued operations $fill in the blank 1 b) Income tax expense or credit for discontinued operations $fill in the blank 3 c) After tax income or loss from discontinued operations $fill in the blank 5 d) Pretax income or loss on write-down of Division F held-for-sale $fill in the blank 7 e) Income tax expense or credit for write-down of Division F held-for-sale $fill in the blank 9 f) After tax income or loss on write-down of Division F held-for-sale
During December 2016, Smythe Company decides to sell Division F (a component of the company). On December 31, 2016, the company classifies Division F as held for sale. On that date, the book values of Division F's assets and liabilities are $950,000 and $600,000, respectively. Smythe expects to sell Division F in 2017 and estimates that the fair value of Division F is $250,000. During 2016, Division F earned revenues of $1,000,000 and incurred expenses of $1,300,000. Smythe is subject to a 30% income tax rate. Required: 1. Compute the following for Division F of Smythe Company: a) Pretax income or loss from discontinued operations $fill in the blank 1 b) Income tax expense or credit for discontinued operations $fill in the blank 3 c) After tax income or loss from discontinued operations $fill in the blank 5 d) Pretax income or loss on write-down of Division F held-for-sale $fill in the blank 7 e) Income tax expense or credit for write-down of Division F held-for-sale $fill in the blank 9 f) After tax income or loss on write-down of Division F held-for-sale
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
During December 2016, Smythe Company decides to sell Division F (a component of the company). On December 31, 2016, the company classifies Division F as held for sale. On that date, the book values of Division F's assets and liabilities are $950,000 and $600,000, respectively. Smythe expects to sell Division F in 2017 and estimates that the fair value of Division F is $250,000. During 2016, Division F earned revenues of $1,000,000 and incurred expenses of $1,300,000. Smythe is subject to a 30% income tax rate.
Required:
1. Compute the following for Division F of Smythe Company:
| a) Pretax income or loss from discontinued operations | $fill in the blank 1 |
|
| b) Income tax expense or credit for discontinued operations | $fill in the blank 3 |
|
| c) After tax income or loss from discontinued operations | $fill in the blank 5 |
|
| d) Pretax income or loss on write-down of Division F held-for-sale | $fill in the blank 7 |
|
| e) Income tax expense or credit for write-down of Division F held-for-sale | $fill in the blank 9 |
|
| f) After tax income or loss on write-down of Division F held-for-sale |
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