Munnster Corporation's income statements for the years ended December 31, 2014, and 2013 included the following information before adjustments: Operating income Gain on sale of division Provision for income taxes Net income 2014 $ 900,000 350,000 $1,250,000 (375,000) $ 875,000 2013 $750,000 $750,000 (225,000) $525,000 On January 1, 2014, Munnster Corporation agreed to sell the assets and product line of one of its operating divisions for $2,000,000. The sale was consummated on December 31, 2014, and it resulted in a gain on disposition of $350,000. This division's pre-tax net losses were $505,000 in 2014 and $170,000 in 2013. The income tax rate for both years was 30%. Required: Starting with operating income (before tax), prepare revised comparative income statements for 2014 and 2013 showing appropriate details for gain (loss) from discontinued operations.

Munnster Corporation's income statements for the years ended December 31, 2014, and 2013 included the following information before adjustments: Operating income Gain on sale of division Provision for income taxes Net income 2014 $ 900,000 350,000 $1,250,000 (375,000) $ 875,000 2013 $750,000 $750,000 (225,000) $525,000 On January 1, 2014, Munnster Corporation agreed to sell the assets and product line of one of its operating divisions for $2,000,000. The sale was consummated on December 31, 2014, and it resulted in a gain on disposition of $350,000. This division's pre-tax net losses were $505,000 in 2014 and $170,000 in 2013. The income tax rate for both years was 30%. Required: Starting with operating income (before tax), prepare revised comparative income statements for 2014 and 2013 showing appropriate details for gain (loss) from discontinued operations.

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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