On June 1, 2021, Startlet Company approved a plan to dispose of a business segment. It is expected that the sale will occur on April 30, 2022. On December 31, 2021, the carrying value of net assets of the segment was P4,000,000 and the net recoverable amount was P3,600,000. During 2021, the company paid employees severance and relocation costs of P200,000 as a direct result of the discontinuing operation. The revenues and expenses of the discontinuing segment during 2021 were: Revenue Expenses P4,000,000 1,800,000 Period covered January 1 to May 31 June 1 to December 31 P3,000,000 1,400,000 Income tax rate is 35%. What amount should be reported as loss from discontinued operation for 2021?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question
On June 1, 2021, Startlet Company approved a plan to dispose of a business segment.
It is expected that the sale will occur on April 30, 2022. On December 31, 2021, the
carrying value of net assets of the segment was P4,000,000 and the net recoverable
amount was P3,600,000. During 2021, the company paid employees severance and
relocation costs of P200,000 as a direct result of the discontinuing operation. The
revenues and expenses of the discontinuing segment during 2021 were:
Period covered
January 1 to May 31
June 1 to December 31
Revenue
P3,000,000
1,400,000
Expenses
P4,000,000
1,800,000
Income tax rate is 35%.
What amount should be reported as loss from discontinued operation for 2021?
Transcribed Image Text:On June 1, 2021, Startlet Company approved a plan to dispose of a business segment. It is expected that the sale will occur on April 30, 2022. On December 31, 2021, the carrying value of net assets of the segment was P4,000,000 and the net recoverable amount was P3,600,000. During 2021, the company paid employees severance and relocation costs of P200,000 as a direct result of the discontinuing operation. The revenues and expenses of the discontinuing segment during 2021 were: Period covered January 1 to May 31 June 1 to December 31 Revenue P3,000,000 1,400,000 Expenses P4,000,000 1,800,000 Income tax rate is 35%. What amount should be reported as loss from discontinued operation for 2021?
Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Section 179 Deduction and Modified Accelerated Cost Recovery System (MACRS) Depreciation
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
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education