On December 31, 2019, the Board of Directors of EFF Company committed to a plan to discontinue the operations of its furniture division. The entity estimated that the furniture’s operating loss for 2020 would be ₱500,000 and that the fair value of its facilities was ₱300,000 less than the carrying amount. The furniture division’s 2019 operating loss was ₱1,400,000 and the division was actually sold for ₱400,000 less than the carrying amount in 2020. The effective tax rate is 30%. What amount should be reported as loss from discontinued operations in 2019? ₱ 1,190,000 ₱ 0 ₱ 1,400,000 ₱ 980,000
On December 31, 2019, the Board of Directors of EFF Company committed to a plan to discontinue the operations of its furniture division. The entity estimated that the furniture’s operating loss for 2020 would be ₱500,000 and that the fair value of its facilities was ₱300,000 less than the carrying amount. The furniture division’s 2019 operating loss was ₱1,400,000 and the division was actually sold for ₱400,000 less than the carrying amount in 2020. The effective tax rate is 30%. What amount should be reported as loss from discontinued operations in 2019? ₱ 1,190,000 ₱ 0 ₱ 1,400,000 ₱ 980,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On December 31, 2019, the Board of Directors of EFF Company committed to a plan to discontinue the operations of its furniture division. The entity estimated that the furniture’s operating loss for 2020 would be ₱500,000 and that the fair value of its facilities was ₱300,000 less than the carrying amount. The furniture division’s 2019 operating loss was ₱1,400,000 and the division was actually sold for ₱400,000 less than the carrying amount in 2020. The effective tax rate is 30%. What amount should be reported as loss from discontinued operations in 2019?
₱ 1,190,000
₱ 0
₱ 1,400,000
₱ 980,000
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