Chance Company had two operating divisions, one manufacturing
farm equipment and the other office supplies. Both divisions are
considered separate components as defined by generally accepted
accounting principles. The farm equipment component had been
unprofitable, and on September 1, 2018, the company adopted a plan
to sell the assets of the division. The actual sale was completed
on December 15, 2018, at a price of $740,000. The book value of the
division’s assets was $1,290,000, resulting in a before-tax loss of
$550,000 on the sale.
The division incurred a before-tax operating loss from operations
of $160,000 from the beginning of the year through December 15. The
income tax rate is 30%. Chance’s after-tax income from its
continuing operations is $530,000.
Required:
Prepare an income statement for 2018 beginning with income from
continuing operations. Include appropriate EPS disclosures assuming
that 100,000 shares of common stock were outstanding throughout the
year. (Amounts to be deducted should be indicated with a
minus sign. Round EPS answers to 2 decimal places.)
Income statement
After-tax income from continuing operations | 530,000 |
Discontinued operations: | |
Loss from disposal of division, net of taxes (550,000 - 550,000 x 30%) | - 385,000 |
Loss from discontinued operations, net of taxes (160,000 - 160,000 x 30%) | - 112,000 |
Net income | $33,000 |
EPS (Net income/shares of common stock outstanding) (33,000/100,000) | $0.33 |
Kindly comment if you need further assistance. Thanks
Chance Company had two operating divisions, one manufacturing farm equipment and the other office supplies. Both...
Chance Company had two operating divisions, one manufacturing farm equipment and the other office supplies. Both divisions are considered separate components as defined by generally accepted accounting principles. The farm equipment component had been unprofitable, and on September 1, 2018, the company adopted a plan to sell the assets of the division. The actual sale was completed on December 15, 2018, at a price of $680,000. The book value of the division’s assets was $1,170,000, resulting in a before-tax loss...
Chance Company had two operating divisions, one manufacturing farm equipment and the other office supplies. Both divisions are considered separate components as defined by generally accepted accounting principles. The farm equipment component had been unprofitable, and on September 1, 2021, the company adopted a plan to sell the assets of the division. The actual sale was completed on December 15, 2021, at a price of $700,000. The book value of the division’s assets was $1,210,000, resulting in a before-tax loss...
Chance Company had two operating divisions, one manufacturing farm equipment and the other office supplies. Both divisions are considered separate components as defined by generally accepted accounting principles. The farm equipment component had been unprofitable, and on September 1, 2021, the company adopted a plan to sell the assets of the division. The actual sale was completed on December 15, 2021, at a price of $790,000. The book value of the division’s assets was $1,390,000, resulting in a before-tax loss...
Chance Company had two operating divisions, one manufacturing farm equipment and the other office supplies. Both divisions are considered separate components as defined by generally accepted accounting principles. The farm equipment component had been unprofitable, and on September 1, 2021, the company adopted a plan to sell the assets of the division. The actual sale was completed on December 15, 2021, at a price of $650,000. The book value of the division’s assets was $1,110,000, resulting in a before-tax...
Chance Company had two operating divisions, one manufacturing farm equipment and the other office supplies. Both divisions are considered separate components as defined by generally accepted accounting principles. The farm equipment component had been unprofitable, and on September 1, 2021, the company adopted a plan to sell the assets of the division. The actual sale was completed on December 15, 2021, at a price of $750,000. The book value of the division’s assets was $1,310,000, resulting in a before-tax loss...
Chance Company had two operating divisions, one manufacturing farm equipment and the other office supplies. Both divisions are considered separate components as defined by generally accepted accounting principles. The farm equipment component had been unprofitable, and on September 1, 2021, the company adopted a plan to sell the assets of the division. The actual sale was completed on December 15, 2021, at a price of $740,000. The book value of the division's assets was $1,290,000, resulting in a before-tax loss...
Chance Company had two operating divisions, one manufacturing farm equipment and the other office supplies. Both divisions are considered separate components as defined by generally accepted accounting principles. The farm equipment component had been unprofitable, and on September 1, 2018, the company adopted a plan to sell the assets of the division. The actual sale was completed on December 15, 2018, at a price of $660,000. The book value of the division's assets was $1,130,000, resulting In a before-tax loss...
Chance Company had two operating divisions, one manufacturing farm equipment and the other office supplies. Both divisions are considered separate components as defined by generally accepted accounting principles. The farm equipment component had been unprofitable, and on September 1, 2021, the company adopted a plan to sell the assets of the division. The actual sale was completed on December 15, 2021, at a price of $610,000. The book value of the division's assets was $1,020,000, resulting in a before tax...
Chance Company had two operating divisions, one manufacturing farm equipment and the other office supplies. Both divisions are considered separate components as defined by generally accepted accounting principles. The farm equipment component had been unprofitable, and on September 1, 2021, the company adopted a plan to sell the assets of the division. The actual sale was completed on December 15, 2021, at a price of $680,000. The book value of the division's assets was $1,170,000, resulting in a before-tax loss...
Chance Company had two operating divisions, one manufacturing farm equipment and the other office supplies. Both divisions are considered separate components as defined by generally accepted accounting principles. The farm equipment component had been unprofitable, and on September 1, 2021, the company adopted a plan to sell the assets of the division. The actual sale was completed on December 15, 2021, at a price of $760,000. The book value of the division's assets was $1,330,000, resulting in a before-tax loss...