During 2020, Door Inc. decided to dispose of Bell Division, considered a separate reportable segment. Door...
During 2020, Door Inc. decided to dispose of Bell Division, considered a separate reportable segment. Door estimates it can sell Bell at a loss of $30,000, which it does on May 1, 2020. Bell’s operating income from January 1 to April 30 was $23,000. Ignoring taxes, and assuming statements are prepared under ASPE, the discontinued operations section of Door’s income statement for the year ended December 31, 2020 should report
the $23,000 operating income and the $30,000 loss in the body of the income statement.
only the income from Door’s other divisions. Since it no longer owns Bell at December 31, Door does not need to report anything relating to Bell’s operations during the year.
the $23,000 operating income in the body of the income statement and the $30,000 loss in the discontinued operations section of the income statement.
the $23,000 operating income and the $30,000 loss in the discontinued operations section of the income statement.
Homework Answers
Under ASPE, the discontinued operations section of Door’s income statement for the year ended December 31, 2020 should report the $23,000 operating income and the $30,000 loss in the discontinued operations section of the income statement.
Correct answer is option 4.
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During 2020, Door Inc. decided to dispose of Bell Division,
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QUESTION 1 During 2020, Lopez Corporation disposed of Pine Division, a major component of its business,...
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Counting Crows Inc. provided the following information for the year 2020. Retained earnings, January 1, 2020...
Counting Crows Inc. provided the following information for the
year 2020.
Retained earnings, January 1, 2020
$
600,000
Administrative expenses
240,000
Selling expenses
300,000
Sales revenue
1,900,000
Cash dividends declared
80,000
Cost of goods sold
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Loss on discontinued operations
110,000
Rent revenue
102,700
Unrealized holding gain on available-for-sale debt
securities
17,000
Income tax applicable to continuing operations
187,000
Income tax benefit applicable to loss on discontinued
operations
60,500
Income tax applicable to unrealized holding gain on
available-for-sale debt securities...
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The following information was taken from the records of Sheffield Inc. for the year 2020: Income...
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QUESTION 1 During 2020, Lopez Corporation disposed of Pine Division, a major component of its business, the company realized a gain of $3,000,000, net of taxes, on the sale of Pine's assets. Pine's operating losses, net of taxes, were $3,500,000 in 2020. How should these facts be reported in the company's income statement for 2020? Total Amount to be Included in Results of Discontinued Operations 3,500,000 loss $3,000,000 gain 0 500,000 loss Income from Continuing Operations 3,000,000 gain $3,500,000 loss...
Counting Crows Inc. provided the following information for the
year 2020.
Retained earnings, January 1, 2020
$
600,000
Administrative expenses
240,000
Selling expenses
300,000
Sales revenue
1,900,000
Cash dividends declared
80,000
Cost of goods sold
850,000
Loss on discontinued operations
110,000
Rent revenue
102,700
Unrealized holding gain on available-for-sale debt
securities
17,000
Income tax applicable to continuing operations
187,000
Income tax benefit applicable to loss on discontinued
operations
60,500
Income tax applicable to unrealized holding gain on
available-for-sale debt securities...
Pina Colada Inc. reported income from continuing operations before tax of $2,058,500 during 2020. Additional transactions occurring in 2020 but not included in the $2,058,500 were as follows: 1. The corporation experienced an insured flood loss of $92,000 during the year. 2. At the beginning of 2018, the corporation purchased a machine for $70,800 (residual value of $17,400) that has a useful life of six years. The bookkeeper used straight-line depreciation for 2018, 2019, and 2020, but failed to deduct...
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Maher Inc. reported income from continuing operations before taxes during 2020 of $790,000. Additional transactions occurring in 2020 but not used in computing the $790,000 are as follows. > Sale of securities held as a part of its portfolio resulted in a loss of $57,000 (pretax). > When its president died, the corporation realized $150,000 from an insurance policy. The cash surrender value of this policy had been carried on the books as an investment in the amount of $46,000....
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