On October 31, Leigh Corp, approved a formal plan to dispose of its Knit Products Division. On December 31, the Knit Products Division was held for sale i The Knit Products Division (considered a separate business component) reported a net loss from operations of $303,000 before tax for the year ended De Products Division has a book value and fair value (after selling expenses) of $2,160,000 and $1,980,000, respectively. Leigh Corp, reported income from com $540,000 before tax for the year. a Assuming an income tax rate of 25%, prepare an income statement beginning with Income from Continuing Operations. Ignore earnings pers Use a negative sign to indicate a loss. Leigh Corp. Income Statement Year Ended December 31 Income from continuing operations Discontinued operations Loss from discontinued operations, net of tax savings nairmon ateinan

On October 31, Leigh Corp, approved a formal plan to dispose of its Knit Products Division. On December 31, the Knit Products Division was held for sale i The Knit Products Division (considered a separate business component) reported a net loss from operations of $303,000 before tax for the year ended De Products Division has a book value and fair value (after selling expenses) of $2,160,000 and $1,980,000, respectively. Leigh Corp, reported income from com $540,000 before tax for the year. a Assuming an income tax rate of 25%, prepare an income statement beginning with Income from Continuing Operations. Ignore earnings pers Use a negative sign to indicate a loss. Leigh Corp. Income Statement Year Ended December 31 Income from continuing operations Discontinued operations Loss from discontinued operations, net of tax savings nairmon ateinan

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter5: The Income Statement And The Statement Of Cash Flows

Section: Chapter Questions

Problem 2P

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Reporting Discontinued Operations On October 31, 2020, Leigh Corp. approved a formal plan to dispose of its Knit Products Division. On December 31, 2020, the Knit Products Division was held for sale but had not been sold. The Knit Products Division (considered a separate business component) reported a net loss from operations of $1,515,000 before tax for the year ended December 31, 2020. The Knit Products Division has a book value and fair value (after selling expenses) of $10,800,000 and $9,900,000, respectively. Leigh Corp. reported income from continuing operations of $2,700,000 before tax for 2020. a. Assuming an income tax rate of 25%, prepare an income statement beginning with Income from Continuing Operations. Ignore earnings per share disclosures. Use a negative sign to indicate a loss. Leigh Corp. Income Statement Year Ended December 31, 2020 Income from continuing operations Discontinued operations Loss from discontinued operations, net of…
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On November 1, 2021, Jamison Inc. adopted a plan to discontinue its barge division, which qualifies as a separate component of the business according to GAAP regarding discontinued operations. The disposal of the division was expected to be concluded by April 30, 2022. On December 31, 2021, the company's year-end, the following information relative to the discontinued division was accumulated: Operating loss Jan. 1–Dec. 31, 2021 $ 65 million Estimated operating losses, Jan. 1 to April 30, 2022 80 million Excess of fair value, less costs to sell, over book value at Dec. 31, 2021 15 million In its income statement for the year ended December 31, 2021, Jamison would report a before-tax loss on discontinued operations of: Multiple Choice $65 million. $50 million. $130 million. $145 million.
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On November 30, Fleiner Company announced its plans to discontinue the operations of Division P (a major component of the company) by selling the division. On December 31, Division P had not yet been sold and was classified as held for sale. On this date, Division P had assets with a book value of $920,000 and liabilities with a book value of $610,000. Fleiner estimates that the fair value of Division P on this date is $190,000. During the year, Division P earned revenues of $920,000 and incurred expenses of $980,000. Fleiner is subject to a 30% income tax rate. 1. Compute the following for Division P of Fleiner Company: a) Pretax income or loss from discontinued operations -$60,000 b) Income tax expense or credit for discontinued operations $18,000 c) After tax income or loss from discontinued operations -$42,000 d) Pretax income or loss on write-down of Division P held-for-sale -$1,200 e) Income tax expense or credit for write-down of Division P held-for-sale $36,000…
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On May 31, 2015, top management of Stafford Manufacturing Co. decided to dispose of an unprofitable business component. An operating loss of $210,000 associated with the component was incurred during the year. The plant facilities associated with the business segment were sold on November 30, and a $23,000 gain was realized on the sale of the plant assets. Assuming a 30% tax rate, prepare the discontinued operations section of Stafford Manufacturing Co.’s income statement for the year ending December 31, 2015. What additional information about the discontinued segment would be provided by Stafford Manufacturing if it were reporting using the accounting standards of the United Kingdom?
On June 30, Sarasota Corp. discontinued its operations in Mexico. On September 1, Sarasota disposed of the Mexico facility at a pretax loss of $797,000. The applicable tax rate is 28%. Show the discontinued operations section of Sarasota's statement of comprehensive income. SARASOTA CORP. Partial Statement of Comprehensive Income 2$
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?
On July 1, 2018, the company adopted a plan to discontinue a division that qualifies as a component of an entityas defined by GAAP. The assets of the component were sold on September 30, 2018, for $50,000 less than theirbook value. Results of operations for the component (included in the above account balances) were as follows:1/1/2018–9/30/2018 2017Sales $400,000 $500,000Cost of goods sold (290,000) (320,000)Administrative expenses (50,000) (40,000)Selling expenses (20,000) (30,000)Operating income before taxes $ 40,000 $110,000In addition to the account balances above, several events occurred during 2018 that have not yet been reflectedin the above accounts:1. A fire caused $50,000 in uninsured damages to the main office building. The fire was considered to be aninfrequent but not unusual event.2. Inventory that had cost $40,000 had become obsolete because a competitor introduced a better product. Theinventory was sold as scrap for $5,000.3. Income taxes have not yet been…