On September 30, 2020, Welzer Company committed to a plan to sell a division that qualified as a component of the entity according to GAAPregarding discontinued operations and was properly classified as held for sale on December 31, 2020, the end of the company's fiscal year.The division's loss from operations for that year was $232,000,000.The division's book value and fair value less cost to sell on December 31 were $313,000,000 and $201,000,000, respectively. The company'sincome tax rate is 20%.Calculate the before tax amount of the income/(loss) from discontinued operations for that year.

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

Answered: On September 30, 2020, Welzer Company…

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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The following are several figures reported for Allister and Barone as of December 31, 2021: Allister Inventory Sales Investment income Cost of goods sold Operating expenses $ 620,000 $ Barone 420,000 1,240,000 1,040,000 not given 620,000 290,000 520,000 360,000 Allister acquired 90 percent of Barone in January 2020. In allocating the newly acquired subsidiary's fair value at the acquisition date, Allister noted that Barone had developed a customer list worth $80,000 that was unrecorded on its accounting records and had a four-year remaining life. Any remaining excess fair value over Barone's book value was attributed to goodwill. During 2021, Barone sells inventory costing $142,000 to Allister for $204,000. Of this amount, 10 percent remains unsold in Allister's warehouse at year- end. Determine balances for the following items that would appear on Allister's consolidated financial statements for 2021: Inventory Sales Cost of goods sold Operating expenses Net income attributable to…
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…
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