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 s Division F in 2017 and estimates that the fair value of Division F is $250,000. During 2016, Division Fearned 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 Fof Smythe Company: a) Pretax income or loss from discontinued operations %24 b) Income tax expense or credit for discontinued operations c) After tax income or loss from discontinued operations %24 d) Pretax income or loss on write-down of Division F held-for-sale e) Income tax expense or credit for write-down of Division F held-for-sale $ f) After tax income or loss on write-down of Division F held-for-sale 2. Prepare the results from discontinued operations section of Smythe income statement for 2016. Results from discontinued operations: v from operations of discontinued Division F v on write-down of held-for-sale Division F

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 s Division F in 2017 and estimates that the fair value of Division F is $250,000. During 2016, Division Fearned 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 Fof Smythe Company: a) Pretax income or loss from discontinued operations %24 b) Income tax expense or credit for discontinued operations c) After tax income or loss from discontinued operations %24 d) Pretax income or loss on write-down of Division F held-for-sale e) Income tax expense or credit for write-down of Division F held-for-sale $ f) After tax income or loss on write-down of Division F held-for-sale 2. Prepare the results from discontinued operations section of Smythe income statement for 2016. Results from discontinued operations: v from operations of discontinued Division F v on write-down of held-for-sale Division F

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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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 s
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
$
b) Income tax expense or credit for discontinued operations
c) After tax income or loss from discontinued operations
$
d) Pretax income or loss on write-down of Division F held-for-sale
e) Income tax expense or credit for write-down of Division F held-for-sale $
f) After tax income or loss on write-down of Division F held-for-sale
$
2. Prepare the results from discontinued operations section of Smythe income statement for 2016.
Results from discontinued operations:
from operations of discontinued Division F
on write-down of held-for-sale Division F

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