Question

w w . What is correct or incorrect for the work you have completed so far, it does The semiconductor business of the California Microtech Corporation qualifies as a component of the entity according to GAAP.. The book value of the assets of the segment was $17 million. The loss from operations of the segment during 2021 was $3.2 million. Pretax income from continuing operations for the year totaled $6.0 million. The income tax rate is 25%. Assume that the semiconductor segment was not sold during 2021 but was held for sale at year-end. The estimated fair value of the segment's assets, less costs to sell, on December 31 was $18 million Prepare the lower portion of the 2021 income statement beginning with income from continuing operations before income taxes Ignore EPS disclosures (Amounts to be deducted and negative amounts should be indicated with a minus sign. Enter your answers in whole dollars and not in millions.) Answer is not complete. CALIFORNIA MICROTECH CORPORATION Partial Income Statement For the Year Ended December 31, 2021 Income from continuing operations before income $ 6,000,000 Income tax expense 1,500,000 $ 4,500,000 (3.200,000) Income from continuing operations Discontinued operations Loss from operations of discontinued component Income tax benefit Loss on discontinued operations Net income (loss) Prev 6 of 6 Next

Answer 1

Accounting for discontinued operations:

Discontinued operations means a segment either held for sale or disposed off by the entity.

Assumption the segment met all conditions for held for sale

In income statement LOSS form discontinued operations should be recorded at after tax single amount.

Given case loss from discontinued operations is $3.2 million after tax amounts would be $3.2 × 75% as 25% is tax rate

Amount to be mention for discontinued operations will be 2.4 million

We can't recognize any future gain except impairment loss so no treatment for excess of fair value of asset than book value.