Presented below are the condensed income statement of Vital Corporation for the years ended December 31, 2020 and 2019: 2019 5,000,000 4,900,000 3,350,000 3,300,000 1,650,000 1,600,000 675,000 2020 Sales Cost of goods sold Gross income Operating expenses Operating income Gain on sale of division Net income before income tax Income tax expense (35%) Net income 650,000 975,000 950,000 200,000 1,175,000 411,250 763.750 950,000 332,500 _617,500 On October 10, 2020, Chalangs entered into an agreement to sell the assets of one of its geographical segments. The geographical segment comprises operations and cash flows that can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the company. The segment was sold on December 31, 2020, for P1,750,000. The book value of the segment's assets was P1,550,000. The segment's contribution to Chalangs' operating income before tax for each year was as follows: 2020 113,750 loss 81,250 income 2019 Assume that by December 31, 2020, the segment had not yet been sold but was considered held for sale. The fair value of the segment's assets on December 31 was P1,250,000. The post-tax loss from discontinued operations for 2020, based on the above data, should be:
Presented below are the condensed income statement of Vital Corporation for the years ended December 31, 2020 and 2019: 2019 5,000,000 4,900,000 3,350,000 3,300,000 1,650,000 1,600,000 675,000 2020 Sales Cost of goods sold Gross income Operating expenses Operating income Gain on sale of division Net income before income tax Income tax expense (35%) Net income 650,000 975,000 950,000 200,000 1,175,000 411,250 763.750 950,000 332,500 _617,500 On October 10, 2020, Chalangs entered into an agreement to sell the assets of one of its geographical segments. The geographical segment comprises operations and cash flows that can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the company. The segment was sold on December 31, 2020, for P1,750,000. The book value of the segment's assets was P1,550,000. The segment's contribution to Chalangs' operating income before tax for each year was as follows: 2020 113,750 loss 81,250 income 2019 Assume that by December 31, 2020, the segment had not yet been sold but was considered held for sale. The fair value of the segment's assets on December 31 was P1,250,000. The post-tax loss from discontinued operations for 2020, based on the above data, should be:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Presented below are the condensed income statement of Vital Corporation for the years
ended December 31, 2020 and 2019:
2020
2019
5,000,000
3,350,000
1,650,000
675,000
975,000
200,000
1,175,000
411,250
763.750
Sales
Cost of goods sold
Gross income
4,900,000
3,300,000
1,600,000
650,000
950,000
Operating expenses
Operating income
Gain on sale of division
Net income before income tax
950,000
332,500
617,500
Income tax expense (35%)
Net income
On October 10, 2020, Chalangs entered into an agreement to sell the assets of one of its
geographical segments. The geographical segment comprises operations and cash flows
that can be clearly distinguished, operationally and for financial reporting purposes, from
the rest of the company. The segment was sold on December 31, 2020, for P1,750,000.
The book value of the segment's assets was P1,550,000. The segment's contribution to
Chalangs' operating income before tax for each year was as follows:
2020
113,750 loss
81,250 income
2019
Assume that by December 31, 2020, the segment had not yet been sold but was
considered held for sale. The fair value of the segment's assets on December 31 was
P1,250,000. The post-tax loss from discontinued operations for 2020, based on the
above data, should be:
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