Question

On December 31, 2021, the end of the fiscal year, California Microtech Corporation completed the sale of its semiconductor business for $21 million. The semiconductor business segment qualifies as a component of the entity according to GAAP. The book value of the assets of the segment was $19 million. The loss from operations of the segment during 2021 was $3.2 million. Pretax income from continuing operations for the year totaled $6.9 million. The income tax rate is 25% Prepare the lower portion of the 2021 income statement beginning with income from continuing operations before income taxes. Ignore EPS disclosures. (Amounts to be deducted and negative amounts should be indicated with a minus sign. Enter your answers in whole dollars and not in millions.) CALIFORNIA MICROTECH CORPORATION Partial Income Statement For the Year Ended December 31, 2021 Income from continuing operations before income taxes ($ Income tax expense 6,900,000 (1.725,000) $ 5,175,000 Income from continuing operations Discontinued operations: Loss from operations of discontinued component Income tax benefit ineenn Hernntinnenaroline (1,200,000) 300,000 on nail Prev 1 of 6 !!! Next >

Answer 1

California MicroTech Corporation Partial Income Statement For the Year Ended December 31st,2021

Particulars	Amount
Income from continuing operations before Income Taxes	$6,900,000
Icome Tax Expense	$(1,725,000)
Income From Continuing Operations	$5,175,000
Discontinued Operations;
Loss from operations of discontinued component	$(1,200,000)
Income Tax Benefit	$300,000
Loss on Discontinued Operations	$(900,000)
Net Income	$4,275,000

Explanation;

Income Tax Expense = $6,900,000 × 25 % = $1,725,000

Loss from Operations of Discontinued Component;

Gain on sale of Asset	$2,000,000 ($17Million - $16 Million )
Loss From Operation	$3,200,000
Total Before Tax Loss	$(1,200,000)