Question

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 31, 2018, the company's fiscal year-end, the book value of the assets of the horse division was $349,000. On that date, the fair value of the assets, less costs to sell, was $290,000. The before-tax loss from operations of the division for the year was $230,000. The company's effective tax rate is 30%. The after-tax income from continuing operations for 2018 was $490,000. Required: 1. Prepare a partial income statement for 2018 beginning with income from continuing operations. Ignore EPS disclosures. 2. Prepare a partial income statement for 2018 beginning with income from continuing operations. Assuming that the estimated net fair value of the horse division's assets was $580,000, instead of $290,000. Ignore EPS disclosures. Complete this question by entering your answers in the tabs below. Required Required 2 Prepare a partial income statement for 2018 beginning with income from continuing operations. Ignore EPS disclosures. (Amounts to be deducted should be indicated with a minus sign.) KANDON ENTERPRISES, INC. Partial Income Statement For the Year Ended December 31, 2018 Income from continuing operations Discontinued operations gain (loss)

Answer 1

Ansuer kandon Entexprises Nc parti al Tnceme Statement the year Ended Becember 3,208 Incame from Continuing operrabi 490000 ons Dis Continued operabiens Gatn(Lo):| Loss from operatiors 0 ds conbirniud (28o riading ncome tar enebil 30 86700 Loss on Bi contnued Busines 20 230D 28320v Net nexre Loss fronm eperations disContnued Camponent ncuding impairunent lod Leson dis Continued operations

(B.300υτ) Less from operabions (59000) Fmpaitment Lass Cf3y900-900) 289ov0) -ta Les Net bebre Inlome tax benetk 0 (E89ovox 30) 86300 descontinued Net after- tae Lors (420930) operatons (kandon Enterpripes. Statement parkial Income year Ended pecenbey 31, 2018 hlome from contining penations 4990UD Biscontinued operations Crain Less from operatiers Cerrponent dscontinuedC3po) Tnome tax Benetit 69000 30y. on Ais CEntiued usinM LO88 1610u0 329ow Loss from operalins e dis continud compenent C2.30,000) 2nckudes only th operatng toss deng the year here fmpaiment Laf no