machine division, to date, has not been a profitable business segment for the cofmipany. AS 2018, the company created a plan to dispose of the assets of the washing machine division. The sale was completed on December 1st December 2018 at a price of RO 850,000. The book value of the division's assets was RO 950,000. The division incurred a before tax operating profit from operations of RO 150,000 from the beginning of the year through December 1st, 2018. The after-tax income from continuing operations is RO 300,000 for 2018.The income tax rate for the company is 35%. a. Calculate the Net effect on the disposal of segments.
machine division, to date, has not been a profitable business segment for the cofmipany. AS 2018, the company created a plan to dispose of the assets of the washing machine division. The sale was completed on December 1st December 2018 at a price of RO 850,000. The book value of the division's assets was RO 950,000. The division incurred a before tax operating profit from operations of RO 150,000 from the beginning of the year through December 1st, 2018. The after-tax income from continuing operations is RO 300,000 for 2018.The income tax rate for the company is 35%. a. Calculate the Net effect on the disposal of segments.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Plz solve A and B!!
Transcribed Image Text:Gulf sands LLC Company had two operating divisions. One division manufactured washing machine and the other
division manufactured refrigerators. As per GAAP 5, each division is considered separate segments. The washing
machine division, to date, has not been a profitable business segment for the company. As such, on September 1",
2018, the company created a plan to dispose of the assets of the washing machine division. The sale was completed
on December 1st December 2018 at a price of RO 850,000. The book value of the division's assets was RO 950,000.
The division incurred a before tax operating profit from operations of RO 150,000 from the beginning of the year
through December 1st, 2018. The after-tax income from continuing operations is RO 300,000 for 2018.The income tax
rate for the company is 35%.
a. Calculate the Net effect on the disposal of segments.
Transcribed Image Text:The division incurred a bel
through December 1st 2018. The after-tax income from continuing opel
rate for the company is 35%.
a. Calculate the Net effect on the disposal of segments.
Profit OMR 50,000
Loss OMR 62,500
None of the listed choices
Loss OMR 50,000
b. Calculate the income tax benefits/expenses from the segment.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
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,
Accounting
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