On July 1, 2020, an entity decided to discontinue its Electronics Division, a separately identifiable component of business. On December 31,2020, the division has not been completely sold. However, negotiations for the final and complete sale are progressing in a positive manner and it is probable that the disposal will be completed within a year. Analysis of the records for the year disclosed the following data relative to the Electronics Division: Operating loss for 2020 8,000,000 Loss on disposal of some Electronics Division assets during 2020 500,000 Expected operating loss in 2021 preceding final disposal 1,000,000 Expected gain in 2021 on disposal of division 2,000,000 Income tax rate 30% What amount should be reported as loss from discontinued operation in 2020?
On July 1, 2020, an entity decided to discontinue its Electronics Division, a separately identifiable component of business. On December 31,2020, the division has not been completely sold. However, negotiations for the final and complete sale are progressing in a positive manner and it is probable that the disposal will be completed within a year. Analysis of the records for the year disclosed the following data relative to the Electronics Division:
Operating loss for 2020 8,000,000
Loss on disposal of some Electronics Division assets during 2020 500,000
Expected operating loss in 2021 preceding final disposal 1,000,000
Expected gain in 2021 on disposal of division 2,000,000
Income tax rate 30%
What amount should be reported as loss from discontinued operation in 2020?
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
