On May 1 Foxtrot Co. agreed to sell the assets of its Footwear Division to Albanese Inc. for $80 million. The sale was completed on December 3t, 2021 The following additional facts pertain to the transaction: The Footwear Division qualifies as a component of the entity according to GAAP regarding discontinued operations. The book value of Footwear's assets totaled $48 million on the date of the sale. Footwear's operating income was a pre-tax loss of $10 million in 2021 .Foxtrot's income tax rate is 25% In the income statement for the year ended December 31, 2021, Foxtrot Co would report Muile Choice Income tees separted tor cortinung and discortinued operations ncome taes reponed for income and geins only None of these answer choices are comect All ncome taxes combined into one line item

On May 1 Foxtrot Co. agreed to sell the assets of its Footwear Division to Albanese Inc. for $80 million. The sale was completed on December 3t, 2021 The following additional facts pertain to the transaction: The Footwear Division qualifies as a component of the entity according to GAAP regarding discontinued operations. The book value of Footwear's assets totaled $48 million on the date of the sale. Footwear's operating income was a pre-tax loss of $10 million in 2021 .Foxtrot's income tax rate is 25% In the income statement for the year ended December 31, 2021, Foxtrot Co would report Muile Choice Income tees separted tor cortinung and discortinued operations ncome taes reponed for income and geins only None of these answer choices are comect All ncome taxes combined into one line item

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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Question

On May 1. Foxtrot Co. agreed to sel the assets of its Footwear Division to Albanese Inc. for $80 milion. The sale was completed on December 31, 2021
The following additional facts pertain to the transaction:
The Footwear Division qualifies as a component of the entity according to GAAP regarding discontinued operations.
The book value of Footwear's assets totaled $48 million on the date of the sale.
Footwear's operating income was a pre-tax loss of $10 million in 2021.
Foxtrot's income tax rate is 25%
In the Income statement for the year ended December 31, 2021, Foxtrot Co. would report
Mutple Choice
Income teves separted tor cortinuing and discortinued operations
ncome tases reponed for income and gains only
None of these answer choices are comect
All ncome taes combined into one line tem
Why is the second option not correct?

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