Question

On December 31, 2021, the end of the fiscal year, California Microtech Corporation completed the sale of its semiconductor business for $10 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 $8 million. The loss from operations of the segment during 2021 was $3.6 million. Pretax income from continuing operations for the year totaled $5.8 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 5,800,000 Income from continuing operations Discontinued operations: Loss from operations of discontinued component Income tax benefit Income (loss) on discontinued operations Net income (loss) This is a numeric cell, so please enter numbers only.

Answer 1

	California Microtech Corporations
	Partial Income Statement
	For the year ended December 31, 2021
	Income from continuing operations before income taxes	$   58,00,000
Less:	Income tax expense ($58,00,000 X 25%)	$ -14,50,000
(a)	Income from continuing operations	$   43,50,000
	Discontinued operations:
	Loss from operations discontinued components	$ -16,00,000
	Income tax benefit ($1600000 X 25%)	$     4,00,000
(b)	Loss on discontinued operation	$ -12,00,000
(a) + (b)	Net Income	$   31,50,000
	Workings:
	Gain on sale of semiconducter business ($10 million - $8 million)	$   20,00,000
Less:	Loss from operations of the segment	$   36,00,000
	Loss from operations discontinued components	$ -16,00,000