Exercise 4-9 (Algo) Discontinued operations; disposal in subsequent year; solving for unknown [LO4-4] On September 17,...
Exercise 4-9 (Algo) Discontinued operations; disposal in subsequent year; solving for unknown [LO4-4] On September 17, 2021, Ziltech, Inc., entered into an agreement to sell one of its divisions that qualifies as a component of the entity according to generally accepted accounting principles. By December 31, 2021, the company’s fiscal year-end, the division had not yet been sold, but was considered held for sale. The net fair value (fair value minus costs to sell) of the division’s assets at the end of the year was $13 million. The pretax income from operations of the division during 2021 was $3 million. Pretax income from continuing operations for the year totaled $16 million. The income tax rate is 25%. Ziltech reported net income for the year of $6.3 million. Required: Determine the book value of the division's assets on December 31, 2021.
Book value of division's assets= ?
Please write out how you get what you get. I know someone else asked a question similar to this but some of the numbers they got I do not understand how. So if you subtract something write it in () or something. Please. And if there is an easy formula or something let me know. I know the solutions shows net income pretax of 12 mil. with (7.2/.60) but I don't understand how and why)
Homework Answers
Calculation of book value of the division's assets on december 31.2021
It is given that
Net income after tax = $6.3 Million
(reported during the year)
Tax rate is = 25%
Then: Pretax Income will be
Pre-tax Income = Net income after tax / (1 - Tax rate)
= $6.3 Million / (1 - 25%)
= $6.3Million 
0.75
= $ 8.4 Millions
This calculation is come from the income after tax in which already include the tax. in other words net income recorded is 75% and we need to find pre- tax income 100% of income that is why this calculation is done 6.3 millions is 75% in which 25% tax has already been deducted and we need to find book value pre tax income that is $ 8.4 million (100% ) this is just for better understanding.
Calculate total of pre tax income:
Total pre tax income = (pre- tax income from continuing operation) + (Pre-tax income of division)
= $3 Millions + $16 Millions
= $19 Millions
Calculation of loss on sale of division asset
Loss to be recognised = $19 Millions - ($8.4Millions)
= $ 10.6 Millions
calculation of book value of division at the end of the year
Book value of the division asset = net fair value of the division's asset + Loss on sale of division
= $13 Millions + $10.6 Millions
Book value of divisions asset = $23.6 Millions
Ziltech has already booked their income pre tax income in thier financial statement that is $6.3M and pretax income is $8.4M but total of pre tax income is $19M hence diffrence between these two figures has to consider as loss on sale only
book value of should be come from sum of net fair value and loss on sale value of divisions asset
Add Answer to:
Exercise 4-9 (Algo) Discontinued operations; disposal in
subsequent year; solving for unknown [LO4-4] On September 17,...
Exercise 4-8 (Algo) Discontinued operations; disposal in subsequent year [LO4-4] Kandon Enterprises, Inc., has two operating...
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...
On September 17, 2021, Ziltech, Inc., entered into an agreement to sell one of its divisions...
On September 17, 2021, Ziltech, Inc., entered into an agreement to sell one of its divisions that qualifies as a component of the entity according to generally accepted accounting principles. By December 31, 2021, the company's fiscal year-end, the division had not yet been sold, but was considered held for sale. The net fair value (fair value minus costs to sell) of the division's assets at the end of the year was $20 million. The pretax income from operations of...
On September 17, 2021, Ziltech, Inc., entered into an agreement to sell one of its divisions...
On September 17, 2021, Ziltech, Inc., entered into an agreement to sell one of its divisions that qualifies as a component of the entity according to generally accepted accounting principles. By December 31, 2021, the company's fiscal year-end, the division had not yet been sold, but was considered held for sale. The net fair value (fair value minus costs to sell) of the division's assets at the end of the year was $10 million. The pretax income from operations of...
please complete both required income statements Exercise 4-8 (Algo) Discontinued operations; disposal in subsequent year (L04-4)...
please complete both required income statements
Exercise 4-8 (Algo) Discontinued operations; disposal in subsequent year (L04-4) 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...
Exercise 4-8 Discontinued operations; disposal in subsequent year [LO4-4] Kandon Enterprises, Inc., has two operating divisions;...
Exercise 4-8 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, 2018, Kandon adopted a formal plan to sell the division. The sale was completed on April 30, 2019. At December 31, 2018, the component was considered held for sale. On December...
Brief Exercise 4-8 (Algo) Discontinued operations [LO4-4) The semiconductor business of the California Microtech Corporation qualifies...
Brief Exercise 4-8 (Algo) Discontinued operations [LO4-4) 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 $10 million. The loss from operations of the segment during 2021 was $4.7 million, Pretax income from continuing operations for the year totaled $7.7 million. The income tax rate is 25%. Assume that the semiconductor segment was not sold during 2021 but was held for...
please complete both required parts to question Exercise 4-8 (Algo) Discontinued operations; disposal in subsequent year...
please complete both required parts to question
Exercise 4-8 (Algo) Discontinued operations; disposal in subsequent year (L04-4) 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...
On September 17, 2018, Ziltech, Inc., entered into an agreement to sell one of its divisions...
On September 17, 2018, Ziltech, Inc., entered into an agreement to sell one of its divisions that qualifies as a component of the entity according to generally accepted accounting principles. By December 31, 2018, the company’s fiscal year-end, the division had not yet been sold, but was considered held for sale. The net fair value (fair value minus costs to sell) of the division’s assets at the end of the year was $17 million. The pretax income from operations of...
E 4-8 Discontinued operations; disposal in subsequent year • L04-4 Kandon Enterprises, Inc., has two operating...
E 4-8 Discontinued operations; disposal in subsequent year • L04-4 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 princi- ples. 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....
Discontinued Operations D-1On December 31, 2019, Tooluth, Inc., completed the sale of one of its divisions...
Discontinued Operations D-1On December 31, 2019, Tooluth, Inc., completed the sale of one of its divisions for $5 million. The division qualifies as a separate component of an entity as defined by GAAP. The book value of the assets of the division was $3 million. The operating loss of the division during 2019 was $2.5 million. Pretax income from continuing operations for the year totaled $6 million. The income tax rate is 30%. Required: Prepare the lower portion of the...
On September 17, 2021, Ziltech, Inc., entered into an agreement to sell one of its divisions that qualifies as a component of the entity according to generally accepted accounting principles. By December 31, 2021, the company's fiscal year-end, the division had not yet been sold, but was considered held for sale. The net fair value (fair value minus costs to sell) of the division's assets at the end of the year was $20 million. The pretax income from operations of...
On September 17, 2021, Ziltech, Inc., entered into an agreement to sell one of its divisions that qualifies as a component of the entity according to generally accepted accounting principles. By December 31, 2021, the company's fiscal year-end, the division had not yet been sold, but was considered held for sale. The net fair value (fair value minus costs to sell) of the division's assets at the end of the year was $10 million. The pretax income from operations of...
please complete both required income statements
Exercise 4-8 (Algo) Discontinued operations; disposal in subsequent year (L04-4) 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...
Exercise 4-8 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, 2018, Kandon adopted a formal plan to sell the division. The sale was completed on April 30, 2019. At December 31, 2018, the component was considered held for sale. On December...
Brief Exercise 4-8 (Algo) Discontinued operations [LO4-4) 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 $10 million. The loss from operations of the segment during 2021 was $4.7 million, Pretax income from continuing operations for the year totaled $7.7 million. The income tax rate is 25%. Assume that the semiconductor segment was not sold during 2021 but was held for...
please complete both required parts to question
Exercise 4-8 (Algo) Discontinued operations; disposal in subsequent year (L04-4) 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...
E 4-8 Discontinued operations; disposal in subsequent year • L04-4 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 princi- ples. 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....
Most questions answered within 3 hours.
-
find the critical value associated with a right sided hypothesis of
the mean using a sample...
asked 1 hour ago -
Which of the following statements is true with respect to a
simple linear regression model?
a....
asked 2 hours ago -
The energy required to remove an electron from a surface of a
solid element is called...
asked 3 hours ago -
How would you train your employees to avoid risks of using
mobile devices?
asked 4 hours ago -
Assume Kw = 1.01 ✕ 10−14
For pure water, we can calculate [H3O+ ] = [OH...
asked 5 hours ago -
Suppose that on a temperature scale X, water boils at 203.0°X
and freezes at -105.7°X. What...
asked 6 hours ago -
BaS crystallizes in a cubic unit cell with S2- ions on each
corner and each face....
asked 6 hours ago -
A. 0≤P(Oi)≤10≤P(Oi)≤1 for each i
B. P(Oi)≤0P(Oi)≤0
C. P(Oi)=1+P(OCi)P(Oi)=1+P(OiC)
D. P(Oi)≥1P(Oi)≥1
If an experiment consists of...
asked 8 hours ago -
A battery has an emf of 9.20V and an internal resistance of 1.20
ohm. a)What resistance...
asked 8 hours ago -
The area of an elastic circular loop decreases at a constant
rate, dA/dt = −6.60×10−3 m2/s...
asked 9 hours ago -
The denaturation of proteins can be described by the
equilibrium
F⇌U
where F and U represent...
asked 10 hours ago -
Please answer what the maximum and minimum force is, and the
angle on the ion is...
asked 10 hours ago