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Chance Company had two operating divisions, one manufacturing farm equipment and the other office supplies. Both divisions ar
Kandon Enterprises, Inc., has two operating divisions, one manufactures machinery and the other breeds and sells horses. Both
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Answer #1

1.    Chance Company Partial Income Statement For the Year Ended December 31, 2021

Income From Continuing Operations $560,000
Discontinued Operations ;
Loss from Operation of Discontinued Components ($410,000+$130,000) $(540,000)
Income Tax Benefit ($540,000×40%) $216,000
Loss on Discontinued Operations $(324,000)
Net Income $236,000
Earnings Per Share :
Income From Continuing Operations $5.60
Loss from discontinued operation $3.24
Net Income $2.36

2. (1) Kandon Enterprises Inc. Partial Income Statement For the Year Ended December 31.2021

Income From Continuing Operations $500,000
Discontinued Operations gain (Loss);
Loss from Operations of Discontined Component $(290,000)
Income Tax Benefit (25%) $72,500
Loss on Discontinued Operations $(217,500)
Net Income $282,500

Explanation;  

Loss from Operation of Discontinued Componet = $240,000 +$50,000 = $290,000

Impairment Loss = $350,000 - $300,000 = $50,000

(2) Kandon Enterprises Inc. Partial Income Statement For the Year Ended December 31, 2021

Income From Continuing Operations $500,000
Discontinued Operations Gain (Loss);
Loss from Operation of Discontinued Component $(240,000)
Income Tax Benefit (25%) $60,000
Loss on Discontinued Operations $(180,000)
Net Income $320,000
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