Question

please correct the problem. check both required parts to the question and add anything neccesarry

Exercise 4-8 (Algo) Discontinued operations; disposal in subsequent year (LO4.4) Kandon Enterprises, Inc., has two operating divisions; one manufactures machinery and the other breeds and sells horses. Both divisions are considered separate components as defined by generally accepted accounting principles. The horse division has been unprofitable, and, on November 15, 2021, Kandon adopted a formal plan to sell the division. The sale was completed on April 30, 2022 At December 31, 2021, the component was considered held for sale. On December 31, 2021, the company's fiscal year end, the book value of the assets of the horse division was $361,000. On that date, the fair value of the assets, less costs to sell, was $310,000. The before-tax loss from operations of the division for the year was $250,000. The company's effective tax rate is 25%. The after-tax income from continuing operations for 2021 was $510,000. Required: 1. Prepare a partial income statement for 2021 beginning with income from continuing operations. Ignore EPS disclosures 2. Prepare a partial income statement for 2021 beginning with income from continuing operations. Assume that the estimated net fair value of the horse division's assets was $620,000. Instead of $310,000. Ignore EPS disclosures. ® Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare a partial income statement for 2021 beginning with income from continuing operations. Assume that the estimated net fair value of the horse division's assets was $620,000, instead of $310,000. Ignore EPS disclosures. (Amounts to be deducted should be indicated with a minus sign.) KANDON ENTERPRISES, INC. Partial Income Statement

Answer 1

Answer-

KANDON ENTERPRISES, INC.
Partial Income Statement
For the Year Ended December 31, 2021
	Amount $
Income from continuing operation	510,000
Dis-continuing operation
Loss from operation of discontinued operation ($361,000-$310,000+$250,000)	-301,000
Income tax benefit	75,250
Loss on discontinued operation	-225,750
Net income	284,250

Operating loss	250,000
Impairment loss (361,000-310,000)	51,000
Net loss before tax	301,000
Income tax benefit at 25% ($301,000*25%)	75,250
Net after tax loss from discount. Operation	225,750

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2

KANDON ENTERPRISES, INC.
Partial Income Statement
For the Year Ended December 31, 2021
Income from continuing operations	$ 510,000
Discontinued operations:
Loss from operations of discontinued component	-250,000
Income tax benefit	62,500
Loss on discontinued operations	-187,500
Net income	$ 322,500

Note-Includes only the operating loss of the year.There is no impairment loss.