On December 31, 2024, the end of the fiscal year, California Microtech Corporation completed the sale of its semiconductor businessfor $12 million. The semiconductor business segment qualifies as a component of the entity according to GAAP. Consider the followingadditional information.• The book value of the assets of the segment at the time of the sale was $10 million.• The loss from operations of the segment during 2024 was $3.7 million.• Pretax income from other continuing operations for the year totaled $5.9 million.• The income tax rate is 25%.Prepare the lower portion of the 2024 income statement beginning with income from continuing operations before income taxes.Note: Loss amounts should be indicated with a minus sign. Enter your answers in whole dollars and not in millions. For example,$4,000,000 rather than $4.Answer is complete but not entirely correct.CALIFORNIA MICROTECH CORPORATIONPartial Income StatementFor the Year Ended December 31, 2024Income from continuing operations before incometaxesIncome tax expenseIncome from continuing operationsDiscontinued operations:Loss from operations of discontinued componentIncome tax benefitLoss on discontinued operationsNet income3000(3,700,000) X925,000 X$ 5,900,0001,475,000$4,425,000(2,775,000) x$1,650,000

Net income from continuing operations is Presented on the income statement of the Company after Income after-tax earned from continuing business of the CompanyDiscontinued operations mean Units of a Company that have been shut down due to losses. In Accounting, the gains and losses incurred for that division must be reported separately followed by the relevant income taxes on the company’s income statement. Income from Discontinued Operations is presented separately from those of continuing operations to give a clearer picture. Computation of the Loss from operations of the discontinued componentLoss from operations of discontinued component = Loss from operations - Gain on sale of semi-conductor business= 3,700,000 - ($12,000,000 - $10,000,000)= $3,700,000 - $2,000,000= $1,700,000Computation of the income tax Income tax = $1,700,000 x 25% = $425,000 Final Answer CALIFORNIA MICROTECH CORPORATIONSPartial Income Statement.For the year ended December 31, 2024Income from continuing operations before income taxes $5,900,000Income tax expense$1,475,000Income from continuing operations $4,425,000Discontinued operationsLoss from operations discontinued component($1,700,000) Income tax benefit$425,000 Loss on discontinuing operations ($1,275,000)Net income (loss) $3,150,000

Business

Accounting

n December 31, 2024, the end of the fiscal year, California Microtech Corporation completed the sale of its semi or $12 million. The semiconductor business segment qualifies as a component of the entity according to GAAP. C dditional information. • The book value of the assets of the segment at the time of the sale was $10 million. • The loss from operations of the segment during 2024 was $3.7 million. Pretax income from other continuing operations for the year totaled $5.9 million. . The income tax rate is 25%. repare the lower portion of the 2024 income statement beginning with income from continuing operations befor

n December 31, 2024, the end of the fiscal year, California Microtech Corporation completed the sale of its semi or $12 million. The semiconductor business segment qualifies as a component of the entity according to GAAP. C dditional information. • The book value of the assets of the segment at the time of the sale was $10 million. • The loss from operations of the segment during 2024 was $3.7 million. Pretax income from other continuing operations for the year totaled $5.9 million. . The income tax rate is 25%. repare the lower portion of the 2024 income statement beginning with income from continuing operations befor

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: In its 2023 annual report, Waterway Limited reports beginning-of-the-year total assets of $2,226…

A: The assets turnover is calculated as net sales divided by the average assets. Asset Turnover Ratio =…

Q: ABC acquired 70% of EFG on June 30, 2021. Based on EFG's acquisition- date fair value on intangible…

A: The question is related to Consolidated Financial Statements. Required Compute for Consolidated…

Q: Suppose during 2022 that Federal Express reported the following information (in millions): net sales…

A: Asset Turnover measures a company's efficiency in utilizing its assets to generate sales. It is…

Q: 5. Fortune paid $570,000 cash to acquire 100 percent of Sorden Company's net assets on January 1,…

A: Net Assets of Fair Value = Total Asset - Total LiabilitiesNet Assets of Fair Value = $660,000 -…

Q: Jahlil Corporation has GAAP net income of $4,670,000,000. To compute Jahlil's AFSI, the following…

A: The amount of J Corporation's AFSI is computed as follows:Amount of AFSI = GAAP Net Income + Federal…

Q: During 2023, Door Inc. decided to dispose of Bell Division, which is considered a separate reporting…

A: The company is doing business to generate a profit. Sometimes, a company operates in two or more…

Q: On January 1, 2019 Pink Corp. sold a machine for $7,400 to slink Corp., its wholly-owned subsidiary.…

A: Depreciation: Depreciation means the reduction in the value of an asset over the life of the assets…

Q: During 2022, Concord Corporation reported net sales of $4,674,600 and net income of $1,400,000. Its…

A: The assets turnover ratio indicates the business entity's efficiency in utilizing the total assets…

Q: On December 31, 2024, the end of the fiscal year, Revolutionary Industries completed the sale of its…

A: An income statement is a kind of financial statement that displays a company's earnings for a given…

Q: Required: Prepare an income statement beginning with income from continuing operations. Include…

A: An income statement is a financial report that summarizes a company's revenues, expenses, and…

Q: Jahlil Corporation has GAAP net income of $4,670,000,000. To compute Jahlil's AFSI, the following…

A: Solution:-Introduction:AFSI is the net income or loss on the taxpayer's applicable financial…

Q: operating considered separate components as defined by generally accepted accounting principles. The…

A: Income statement: The financial statement which reports revenues and expenses from business…

Q: Trayer Corporation has income from continuing operations of $254,000 for the year ended December 31,…

A: Income from continuing operations: It is the after tax income generated by a company from its…

Q: Flounder Corp. has income from continuing operations of $246,500 for the year ended December 31,…

A: Comprehensive Income includes Income statement and the other comprehensive income for the period…

Q: The Skywalker Corporation finalized the sale of its droid manufacturing division for $9.4 million on…

A: Operating Income -An accounting tool used to determine a company's profits from its main business…

Q: During 2023, Blue Corp. disposed of Blackberry Division, a major segment of its business. Blue…

A: Income statement is the financial statement which is prepared to show the profitability of the…

Q: On January 1, 2022, Kenya Company, an 80% owned subsidiary of Oliver, Inc., transferred equipment…

A: The objective of this question is to determine how the transfer of equipment from Kenya Company to…

Question

On December 31, 2024, the end of the fiscal year, California Microtech Corporation completed the sale of its semiconductor business
for $12 million. The semiconductor business segment qualifies as a component of the entity according to GAAP. Consider the following
additional information.
• The book value of the assets of the segment at the time of the sale was $10 million.
• The loss from operations of the segment during 2024 was $3.7 million.
• Pretax income from other continuing operations for the year totaled $5.9 million.
• The income tax rate is 25%.
Prepare the lower portion of the 2024 income statement beginning with income from continuing operations before income taxes.
Note: Loss amounts should be indicated with a minus sign. Enter your answers in whole dollars and not in millions. For example,
$4,000,000 rather than $4.
Answer is complete but not entirely correct.
CALIFORNIA MICROTECH CORPORATION
Partial Income Statement
For the Year Ended December 31, 2024
Income from continuing operations before income
taxes
Income tax expense
Income from continuing operations
Discontinued operations:
Loss from operations of discontinued component
Income tax benefit
Loss on discontinued operations
Net income
3000
(3,700,000) X
925,000 X
$ 5,900,000
1,475,000
$4,425,000
(2,775,000) x
$1,650,000

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: Introduction

VIEW

Step 2: Working notes for the calculation of the Loss from operations of the discontinued component

VIEW

Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

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.

Similar questions

For 2022, Bramble Corp. reported beginning total assets of $217,000 and ending total assets of $419,000. Its net income for this period was $57,000, and its net sales were $795,000.Compute the company’s asset turnover in times for 2022. (Round answer to 2 decimal places, e.g. 1.25.)
Suppose during 2022 that Federal Express reported the following information (in millions): net sales of $34,400 and net income of $88. Its balance sheet also showed total assets at the beginning of the year of $24,580 and total assets at the end of the year of $23,300. Calculate the asset turnover and return on assets. (Round asset turnover to 2 decimal places, e.g. 6.25 and return on assets to 1 decimal place, e.g. 17.5%.) Asset turnover Return on assets times %
Chance Company had two operating divisions, one manufacturing farm equipment and the other office supplies. Both divisions are considered separate components as defined by generally accepted accounting principles. The farm equipment component had been unprofitable, and on September 1, 2024, the company adopted a plan to sell the assets of the division. Consider the following: • The actual sale was completed on December 15, 2024, at a price of $600,000. The book value of the division's assets was $1,000,000, resulting in a before-tax loss of $400,000 on the sale. • The division incurred a before-tax operating loss from operations of $120,000 from the beginning of the year through December 15. . • Chance's after-tax income from its continuing operations is $550,000. • The income tax rate is 25%. Required: Prepare an income statement beginning with income from continuing operations. Include appropriate EPS disclosures assuming that 100,000 shares of common stock were outstanding…
On January 1, 2022, P Company acquired 80% of S Company forP2,000,000. The fair value of identifiable net assets is P1,800,000. NCI ismeasured at fair value. During 2022, P Company ships merchandise to SCompany costing P1,000, 000 at 20% above cost. Additional data are asfollows:P Company S CompanySales 5,500,000 2,500,000Cost of Sales 3,200,000 1,600,000Operating Expense 650,000 300,000The ending inventories of S Company includes merchandise from PCompany amounting to P60,000. Impairment of goodwill is P20,000.How much is the consolidated gross profit?
On January 2, 2030, Esko Corp. acquired all the net assets of Tolits Inc. Esko Corp. paid P6,000,000 for the net assets of Tolits Inc. On this date, the following accounts of Tolits, Inc. are as follows: Cash – P150,000; Accounts Receivable – P1,600,000; Inventories – P600,000; Property, plant, and equipment – P2,600,000; Accounts Payable – P1,400,000. On the date of acquisition, it was determined that the fair values of inventories and property, plant, and equipment were P660,000 and P3,400,000, respectively. Esko Corp. has estimated a restructuring provision of P500,000 representing costs of exiting the activity of Tolits Inc., cost of terminating the employees of Tolits Inc. Compute the goodwill or gain from acquisition. * a. P 2,950,000 b. P 1,590,000 c. P 2,090,000 d. P 2,450,000 pls. answer it asap thank you:)
AAA Inc. Was merge into BBB Corp. in a combination properly accounted for as acquisition of interest. Their condensed Statement of Financial Position before the combination show: ввB Cогр. 88,000 420,000 1,119,600 1,040,000 260,000 171,600 AAA Inc. Cash 88,000 500,000 1,700,000 4,654,000 Accounts Receivable, net Inventory Property Plant and Equipment Patent Accounts Payable Mortgage Payable Capital Stock, par P100 Share Premium Retained Earnings 1,000,000 1,704,000 2,600,000 390,000 1,300,000 390,000 1,066,000 1,248,000 As per independent appraiser's report, BBB's assets have fair market value of P1,653,600 for current assets, P1,248,000 for plant and equipment and P338,000 for patents. BBB's liabilities are properly valued. AAA purchases BBB's net asset for P4,000,000. Compute for the consolidated asset after acquisition.
The semiconductor business of the California Microtech Corporation qualifies as a component of the entity according to GAAP. The book value of the assets of the segment was $19 million. The loss from operations of the segment during 2021 was $3.3 million. Pretax income from continuing operations for the year totaled $6.1 million. The income tax rate is 25%. Assume that the semiconductor segment was not sold during 2021 but was held for sale at year-end. The estimated fair value of the segment’s assets, less costs to sell, on December 31 was $20 million. Prepare the lower portion of the 2021 income statement beginning with income from continuing operations before income taxes. Ignore EPS disclosures. (Amounts to be deducted and negative amounts should be indicated with a minus sign. Enter your answers in whole dollars and not in millions.)
On August 31, 2018, ABC purchased a building at P13,000,000 to earn rent income from operating leases. The entity incurred legal fees and transfer taxes of P500,000. The building has a residual value of P1,500,000 and an estimated useful life of 30 years. During the first year of acquisition, incurred operating costs of P2,000,000 but only earned rent income of P500,000. It was valued at P16,000,000 and P14,000,000 as of the end of 2018 and 2019. What is the carrying value of the investment property as of Dec. 31, 2018 using the cost model? With solution and good accounting form pls thank you!
Action, Inc. acquired the following assets and assumed the related liabilities of Slacker Corp. in a transaction completed on February 16, 2023: Accounts receivable, net Inventories Property, plant & equipment Non-amortizable intangible assets Carrying value for Slacker Current liabilities Noncurrent liabilities $ 11,000 $ 50,000 $ 100,000 $ 200,000 Fair Value $ 10,000 $ 50,000 $ 150,000 $ 225,000 $ (40,000) $(200,000) $ (40,000) $(200,000) Action paid $205,000 in cash for all of the above from Slacker. a) Determine if Action must record any goodwill. Show any calculations. b) Record the acquisition in Action's general journal on Feb. 16, 2023. Show: any calculations. c) Prepare any adjusting entry for amortization required as of the fiscal year end, December 31, 2023. If no amortization is required, explain why.
4. On November 1, 2021, Agar-Agar Corporation had a division that met the criteria for discontinuance of a business component. For the period January 1 through November 1, 2021, the component had a revenue of P1,000,000 and expenses of P1,200,000. The assets of the component were sold on November 2, 2021 at a loss of P100,000. The income from continuing operations of Agar-Agar for 2021 was P5,000,000. The income tax rate is 25%. What amount should be reported as net income for 2021?
ABC Corp, comitted to sell a division on March 22, 2022. It sold the division on June 14, 2024. Income from operating this divisio was $2,408,000, $829,600 and $247,200 in 2022, 2023 and 2024, respectively. On December 31, 2022, the carrying value of the division was $7,080,000 and the fair value was &7,000,000. On December 31, 2023, the fair value of the division was $7,160,000 and the carrying value of the division was $7,080,000. The division was sold for $6,880,000 when the carrying value was $7,080,000 Prepare the discontinued operations section of the income statement for 2022 throuh 2024, assuming ABC Corp's income tax rate is 20%
Compute for the consolidated cost of goods sold.