On October 28, 2021, a company committed to a plan to sell a division that qualified as a component of the entity according to GAAP regarding discontinued operations and was properly classified as held for sale on December 31, 2021, the end of the company's fiscal year. The division's loss from operations for 2021 was $1,870,00o. The division's book value and fair value less cost to sell on December 31 were $3,150,000 and $2,480,000, respectively. What before-tax amount(s) should the company report as loss on discontinued operations in its 2021 income statement? Multiple Choice $1,870,000 loss. $2.540,000 loss. No loss would be reported.

On October 28, 2021, a company committed to a plan to sell a division that qualified as a component of the entity according to GAAP regarding discontinued operations and was properly classified as held for sale on December 31, 2021, the end of the company's fiscal year. The division's loss from operations for 2021 was $1,870,00o. The division's book value and fair value less cost to sell on December 31 were $3,150,000 and $2,480,000, respectively. What before-tax amount(s) should the company report as loss on discontinued operations in its 2021 income statement? Multiple Choice $1,870,000 loss. $2.540,000 loss. No loss would be reported.

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: Pell Company acquires 80% of Demers Company for $500,000 on January 1, 2019. Demers reported common…

A: Answer:- When two or more business entities are connected to one another, consolidated financial…

Q: On October 1, 2020, Croatan Corporation finalized its plans to discontinue operations of its retail…

A: Introduction A Particular division in an organization which the management of organization decides…

Q: Atoms, Inc. committed to sell a division on March 22, 2022. It sold the division on June 14, 2024.…

A: A component of a business that has been discontinued or is being held for sale can have its…

Q: Pell Company acquires 80% of Demers Company for $500,000 on January 1, 2019. Demers reported common…

A: A consolidated financial statement refers to a statement that presents grouped information of a…

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: 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: On December 31, 2024, the end of the fiscal year, California Microtech Corporation held its…

A: Introduction:-A partial income statement is a financial document that professional may prepare for a…

Q: During the current period, a subsidiary entity sold inventories to a parent entity for $41000. The…

A: The profit on intra-group transactions is calculated as the difference between the selling price and…

Q: During 2020, SBD closed facilities which were made redundant by the acquisition of Niscayah. Assume…

A: Journal Entries: The recording of financial transactions for the first time in books of accounts…

Q: A non-current asset with a carrying amount of $2400 was sold by the parent to its subsidiary for…

A: The first step in preparing the consolidation worksheet adjusting entries is to identify the…

Q: On January 1, 2021, ABC Company sold machinery to MNO, its wholly-owned subsidiary for P450,000. The…

A: Depreciation is the decrease in the book value of the tangible asset which gives benefit for more…

Q: On September 30, 2020, Welzer Company committed to a plan to sell a division that qualified as a…

A: As per accounting standard once assets classified as held for sale it is valued initially at fair…

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: On September 15, 2020, ZTH Inc.'s Board of Directors developed a formal plan to dispose of its Horse…

A: Transactions of the Horse division must be recorded separately after the company has decided to…

Q: On December 31, 2024, the end of the fiscal year, California Microtech Corporation completed the…

A: An income statement is one of the financial statements of a company that shows the company's…

Q: Pell Company acquires 80% of Demers Company for $500,000 on January 1, 2019. Demers reported common…

A: “Since you have posted a question with multiple sub-parts, we will provide the solution only to the…

Q: On December 31, 2024, the end of the fiscal year, California Microtech Corporation held its…

A: Introduction:- Partial Income statement showing the Income from Continuing operations , loss from…

Q: In2018 Martin Corp.acquired and recorded good will of $45 million .martin consider Glynco a separate…

A: Goodwill is an intangible asset that is for generating super-profits in the future that cannot be…

Q: Kyle, a single taxpayer, worked as a freelance software engineer for the first three months of 2023.…

A: FICA stands for Federal Insurance Contributions Act. It is a payroll tax of united states that must…

Q: On October 1, 2020, Croatan Corporation finalized its plans to discontinue operations of its retail…

A: A Particular division in an organization which the management of organization decides to sell due to…

Concept explainers

Consolidation

Consolidation in general examination implies an asset oscillating between well-defined methods of trading status. Consolidation is commonly known as market indecisiveness, which completes when the asset's values move forward or backward the trading structure.

Question

Multiple Choice
$1,870,000 loss.
$2,540,000 loss.
No loss would be reported.
$670,000 impairment loss included in continuing operations and a $1.870.000 loss from discontinued operations.
< Prev
5 of 15
Next >
...

I|- Chapter 4
Saved
Help
Save & Exit
On October 28 , 2021, a company committed to a plan to sell a division that qualified as a component of the entity according to GAAP regarding
discontinued operations and was properly classified as held for sale on December 31, 2021, the end of the company's fiscal year. The division's
loss from operations for 2021 was $1,870,000.
The division's book value and fair value less cost to sell on December 31 were $3,150,000 and $2,480,000, respectively. What before-tax
amount(s) should the company report as loss on discontinued operations in its 2021 income statement?
Multiple Choice
$1,870,000 los.
$2,540,000 loss.
No loss would be reported.
< Prev
5 of 15
Next >

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

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 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

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?
am. 105.
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%
On July 31, 2020, Lee Co. a public company decides to put one of the divisions up for sale so that it can focus on further developing its other division. The capital assets of the division up for sale (recorded to the PPE account), were purchased January 1, 2016 with an original cost of $990,000. The annual depreciation is $33,000. The fair value of the building on July 31, 2020 was $840,000. The costs to sell were $12,000. The income statement on December 31, 2020 of the entity before any adjustments for the asset held for sale was as follows: $8,600,000 $3,500,000 $1,000,000 $240,000 $1,200,000 $798,000 Revenue Cost of goods sold Administrative expenses Depreciation expense Other Expenses Income tax expense Net income 1,862,000 The income statement details for the asset held for sale is as follows: $3,200,000 $1,600,000 $300,000 $33,000 $400,000 $260,100 $606,900 Revenue Cost of goods sold Administrative expenses Depreciation expense Other Expenses Income tax expense Net income…
15.
A company which prepares financial statements to 31 December classifies a non-current asset as held for sale on 1 SEPTEMBER 20X2. The asset's carrying amount at that date is $20,000 and its fair value is $15,600, with estimated costs to sell of $600. The asset is sold in June 20X3 for $16,000(net of costs). Calculate any impairment losses or gains that should be recognised in the company's statement of profit or loss for the year ended 31 December 20X2 if the asset's fair value less costs to sell at 31 December 20X2 is: a)14,000 b)17,000 c)22,000 In each case, also calculate the profit or loss that should be recognised on the disposal of the asset in 20X3 and comment on the results shown.