Determination and distribution of excess income schedule Through this price paid for subsidiary equity is compared with predetermine imbalance which is occurred in the consolidated worksheet because of elimination of in the investment account against the underlying subsidiary equity. To calculate: According to the question, need to prepare determination and distribution of excess schedule along with it recording of this investment is need to made.

Question

During December 2016, Smythe Company decides to sell Division F (a component of the company). On December 31, 2016, the company classifies Division F as held for sale. On that date, the book values of Division F's assets and liabilities are $950,000 and $600,000, respectively. Smythe expects to sell Division F in 2017 and estimates that the fair value of Division F is $250,000. During 2016, Division F earned revenues of $1,000,000 and incurred expenses of $1,300,000. Smythe is subject to a 30% income tax rate. Required: 1. Compute the following for Division F of Smythe Company: a) Pretax income or loss from discontinued operations $fill in the blank 1 b) Income tax expense or credit for discontinued operations $fill in the blank 3 c) After tax income or loss from discontinued operations $fill in the blank 5 d) Pretax income or loss on write-down of Division F held-for-sale $fill in the blank 7 e) Income tax expense or credit for write-down of Division F…

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Question

Chapter 3, Problem 3.4.1P

To determine

Determination and distribution of excess income schedule

Through this price paid for subsidiary equity is compared with predetermine imbalance which is occurred in the consolidated worksheet because of elimination of in the investment account against the underlying subsidiary equity.

To calculate:

According to the question, need to prepare determination and distribution of excess schedule along with it recording of this investment is need to made.

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During December 2016, Smythe Company decides to sell Division F (a component of the company). On December 31, 2016, the company classifies Division F as held for sale. On that date, the book values of Division F's assets and liabilities are $950,000 and $600,000, respectively. Smythe expects to sell Division F in 2017 and estimates that the fair value of Division F is $250,000. During 2016, Division F earned revenues of $1,000,000 and incurred expenses of $1,300,000. Smythe is subject to a 30% income tax rate. Required: 1. Compute the following for Division F of Smythe Company: a) Pretax income or loss from discontinued operations $fill in the blank 1 b) Income tax expense or credit for discontinued operations $fill in the blank 3 c) After tax income or loss from discontinued operations $fill in the blank 5 d) Pretax income or loss on write-down of Division F held-for-sale $fill in the blank 7 e) Income tax expense or credit for write-down of Division F…

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