Income from continuing operations ($1,750,000 − $360,000) | 1,390,000 |
Income tax expense ($1,390,000 × 0.21) | 291,900 |
Income from continuing operations | 1,098,100 |
Discontinued operations: | |
Income from discontinued operations (net of taxes of $75,600) from 1/1X1 through 11/15X1 | 284400 |
Loss on disposal of discontinued operations (net of tax benefit of $31,500) | -118500 |
Net income | 1,264,000 |
Working Note:
Sale price of segment − book value of segment = gain (loss) on disposal |
= $2,750,000 − $2,900,000 = $(150,000) pretax loss. |
On November 15, 20X1 Jones Co. sold a segment of its business for $2,750,000. The net...
On November 15, 20x1 Lima Co. sold a segment of its business for $2,750,000. The net book value of the segment at the time of its disposal was $2,900,000. Lima had pretax income from operations of $1,750,000 for 20x1 which included $360,000 recognized by the discontinued segment prior to its disposal. Assume Lima’ tax rate is 21%. Required: Prepare a partial income statement for Lima Co. for 20x1, beginning with pretax income from continuing operations.
Income Statement Sections
During the current year, David Corporation sold a segment of its
business at a gain of $210,000. Until it was sold, the segment had
a current period operating loss of $75,000. The company had
$700,000 income from continuing operations for the current year.
Prepare the lower part of the income statement, beginning with the
$700,000 income from continuing operations. Follow tax allocation
procedures, assuming that all changes in income are subject to a 20
percent income tax...
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On December 31, 2021, the end of the fiscal year, California
Microtech Corporation completed the sale of its semiconductor
business for $14 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 $13 million. The loss from
operations of the segment during 2021 was $3.8 million. Pretax
income from continuing operations for the year totaled $6.0
million. The income tax rate is 25%.
Prepare the...
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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 $8 million. The loss from operations of the segment during 2021 was $4.60 million Pretax income from continuing operations for the year totaled $760 million. The income tax rate is 25%. Assume instead that the estimated fair value of the segment's assets, less costs to sell on December 31 was $6 million...
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