In 2020, Liyue Corp. operate business in the motor industry and has 3 main divisions, Engine, Motor accessory and Motor Dealership. Because of the overwhelming business activities booming in the engine and motor dealership divisions Liyue decided to sell its lowest earning division,
In 2020, Liyue Corp. operate business in the motor industry and has 3 main divisions, Engine, Motor
accessory and Motor Dealership.
Because of the overwhelming business activities booming in the engine and motor dealership
divisions Liyue decided to sell its lowest earning division, the Accessories division. In a sales
commitment to be executed on March 1, 2021, the provisions made it so that the division qualified
under the classification “Discontinued operations” as of the end of year 2020.
The following information pertains to the two cash generating units of Liyue Corp. on December 31,
2020:
Engine
segment
Accessories
segment
Motor
Dealership
Total assets 8,000,000 4,500,000 18,500,000
Total liabilities 3,000,000 2,200,000 9,600,000
Fair value less cost to dispose 1,800,000
Sales 8,000,000 3,200,000 11,000,000
Cost of sales 3,500,000 1,200,000 7,250,000
Expenses 1,000,000 700,000 3,000,000
Income tax 500,000 220,000 500,00
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