E5-8. Discontinued Operations. Elegant Homes Corporation provided the following statement of net income on December 31, 2022, before the disposal of a business segment. The income statement includes the results of operations of Elegant's mobile home division. The company made a commitment to dispose of the mobile home division on December 1, 2022. Elegant Homes Corporation Income Statement For the Year Ended December 31, 2022 Sales $500 Cost of Goods Sold (120) Gross Profit $380 Selling Expenses (80) General and Administrative Expenses (65) Other Revenues and Expenses (40) Loss on Asset Impairment (38) Income before Tax $157 Income Tax Expense (at 40%) (63) Net Income $ 94 The mobile home division accounts for 20% of sales, cost of goods sold, selling, and general and administra- tive expenses. Assume no gain or loss on remeasurement of the division. Prepare the multiple-step income statement for 2022 only, assuming that Elegant sells the segment on December 31 at a $130 pretax loss. Round to the nearest dollar.
E5-8. Discontinued Operations. Elegant Homes Corporation provided the following statement of net income on December 31, 2022, before the disposal of a business segment. The income statement includes the results of operations of Elegant's mobile home division. The company made a commitment to dispose of the mobile home division on December 1, 2022. Elegant Homes Corporation Income Statement For the Year Ended December 31, 2022 Sales $500 Cost of Goods Sold (120) Gross Profit $380 Selling Expenses (80) General and Administrative Expenses (65) Other Revenues and Expenses (40) Loss on Asset Impairment (38) Income before Tax $157 Income Tax Expense (at 40%) (63) Net Income $ 94 The mobile home division accounts for 20% of sales, cost of goods sold, selling, and general and administra- tive expenses. Assume no gain or loss on remeasurement of the division. Prepare the multiple-step income statement for 2022 only, assuming that Elegant sells the segment on December 31 at a $130 pretax loss. Round to the nearest dollar.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question

Transcribed Image Text:E5-8. Discontinued Operations. Elegant Homes Corporation provided the following statement of net income on
December 31, 2022, before the disposal of a business segment. The income statement includes the results of
operations of Elegant's mobile home division. The company made a commitment to dispose of the mobile
home division on December 1, 2022.
Elegant Homes Corporation
Income Statement
For the Year Ended December 31, 2022
Sales
$500
Cost of Goods Sold
(120)
Gross Profit
$380
Selling Expenses
(80)
General and Administrative Expenses
(65)
Other Revenues and Expenses
(40)
Loss on Asset Impairment
(38)
Income before Tax
$157
Income Tax Expense (at 40%)
(63)
Net Income
$ 94
The mobile home division accounts for 20% of sales, cost of goods sold, selling, and general and administra-
tive expenses. Assume no gain or loss on remeasurement of the division.
Prepare the multiple-step income statement for 2022 only, assuming that Elegant sells the segment on
December 31 at a $130 pretax loss. Round to the nearest dollar.
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