The following condensed profit or loss statement of Sasume Corporation is presented for two years ended December 31, 2024 and 2023:   2024 2023 Net sales 10,000,000 9,000,000 Cost of sales   6,000,000 6,000,000 Gross profit   4,000,000 3,000,000 Operating expenses   2,500,000 2,000,000 Gain on sale of a component      900,000              -- Total   2,400,000 1,000,000 Income tax expense      720,000    300,000 Net income   1,680,000    700,000   On January 1, 2024, Sasume entered into an agreement to sell for P2,000,000 one of its separate operating divisions. The sale resulted in a gain on disposition of P900,000 on November 14, 2024, and qualifies as a discontinued component. This division’s contribution to Sasume’s reported income before income taxes for each year was as follows 2024 P700,000 loss 2023 P400,000 loss Assume an income tax rate of 30%. In preparation of a revised comparative profit or loss, what is the amount to be reported report under the caption “discontinued operations” for 2024?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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The following condensed profit or loss statement of Sasume Corporation is presented for two years ended December 31, 2024 and 2023:

 

2024

2023

Net sales

10,000,000

9,000,000

Cost of sales

  6,000,000

6,000,000

Gross profit

  4,000,000

3,000,000

Operating expenses

  2,500,000

2,000,000

Gain on sale of a component

     900,000

             --

Total

  2,400,000

1,000,000

Income tax expense

     720,000

   300,000

Net income

  1,680,000

   700,000

 

On January 1, 2024, Sasume entered into an agreement to sell for P2,000,000 one of its separate operating divisions. The sale resulted in a gain on disposition of P900,000 on November 14, 2024, and qualifies as a discontinued component. This division’s contribution to Sasume’s reported income before income taxes for each year was as follows

2024

P700,000 loss

2023

P400,000 loss

Assume an income tax rate of 30%. In preparation of a revised comparative profit or loss, what is the amount to be reported report under the caption “discontinued operations” for 2024?

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