WOODBRICKS CORP. decided on September 1, 2021 to dispose of a component of business. The component was sold on October 31, 2021. The net income of WOODBRICKS CORP. for the year 2021 included income of P8,000,000 from operating the discontinued segment from January 1 to the date of disposal. The entity incurred a loss of P3,000,000 on the October 31 sale of the business component. What amount should be reported as pretax income or loss from discontinued operations for 2021?

WOODBRICKS CORP. decided on September 1, 2021 to dispose of a component of business. The component was sold on October 31, 2021. The net income of WOODBRICKS CORP. for the year 2021 included income of P8,000,000 from operating the discontinued segment from January 1 to the date of disposal. The entity incurred a loss of P3,000,000 on the October 31 sale of the business component. What amount should be reported as pretax income or loss from discontinued operations for 2021?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter12: Intangibles

Section: Chapter Questions

Problem 18E

See similar textbooks

Similar questions

On December 1, 2021, Violet Company committed to a plan to dispose of the assets of a business component. The disposal meets the requirements to be classified as discontinued operation. On that date, the entity estimated that the loss from the disposition of the assets would be P700,000 and the component’s operating income was P200,000. What amount of pretax loss should be reported for discontinued operation for 2021?
On December 1, 2021, Violet Company committed to a plan to dispose of the assets of a business component. The disposal meets the requirements to be classified as discontinued operation. On that date, the entity estimated that the loss from the disposition of the assets would be P700,000 and the component’s operating income was P200,000. What amount of pretax loss should be reported for discontinued operation for 2021? A. 900,000 B. 700,000 C. 200,000 D. 500,000 E. None of them
On May 31, 2024, the Arlene Corporation adopted a plan to sell its cosmetics line of business, considered a component of the entity. The assets of the component were sold on October 13, 2024, for $1,120,000. The component generated operating income of $300,000 from January 1, 2024, through disposal. In its income statement for the year ended December 31, 2024, the company reported before-tax income from operations of a discontinued component of $620,000. What was the book value of the assets of the cosmetics component? Multiple Choice $800,000 $1,420,000 $300,000 All of these choices are incorrect.
ABC Company accounted for noncurrent assets using the cost model. On December 31, 2021, the entity classified an equipment as held for sale. At that date, the carrying amount of the equipment was P1,600,000, the fair value was estimated at P1,300,000 and the cost of disposal at P200,000. On January 10, 2022, the equipment was sold for net proceeds of P1,200,000. Impairment loss for the year 2021 a. 200,000b 500,000c. 300,000d. 100,000
On April 30, 2020, Sa Young Nam Company approved a plan to dispose of a segment of its business. At this date, the entity is committed to a plan to sell the segment and classifies its assets as Held for Sale. The carrying value of the segment's net assets on April 30 was P800,000. In compliance with IFRS 5, no further depreciation or amortization was taken up on these assets until they were sold in November. During November, disposal costs incurred by Sa Young Nam totaled P22,500. During the period January 1, 2020 through November 30, 2020, the segment had total revenues of P4,500,000 and total selling and administrative expenses of P4,080,00o. On November 30, 2020, the segment's net assets were sold for P850,000. The income tax rate is 30%. What is the single amount reported as discontinued operations in Sa Young Nam' profit or loss for 2020? A. P447,500 B. P397,500 С. Р313,250 D. P278,250
On May 1. Foxtrot Co. agreed to sel the assets of its Footwear Division to Albanese Inc. for $80 milion. The sale was completed on December 31, 2021 The following additional facts pertain to the transaction: The Footwear Division qualifies as a component of the entity according to GAAP regarding discontinued operations. The book value of Footwear's assets totaled $48 million on the date of the sale. Footwear's operating income was a pre-tax loss of $10 million in 2021. Foxtrot's income tax rate is 25% In the Income statement for the year ended December 31, 2021, Foxtrot Co. would report Mutple Choice Income teves separted tor cortinuing and discortinued operations ncome tases reponed for income and gains only None of these answer choices are comect All ncome taes combined into one line tem Why is the second option not correct?
Splish Brothers Ltd. is a publicly listed company following IFRS. Assume that on December 31. 2020, the carrying amount of land on the statement of financial position (SFP) is $505.000. Management determines that the land's value in use is $435.000 and that the fair value less costs to sell is $400.000. Using the rational entity impairment model, prepare the journal entry required, if any, to record the impairment loss. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit December 31, 2020
An entity had the following events and transactions during 2020:- Depreciation for 2019 was understated by P500,000- A litigation settlement resulted in a loss of P2,000,000- The inventory on December 31, 2018 was overstated by P800,000- The entity disposed of a recreational division at a loss P1,500,000- The income tax rate is 30%What total amount of loss should be included in income from continuing operations for 2020? a. 2,000,000 c. 3,500,000 b. 1,400,000 d. 2,450,000 EXPLAIN THE ANSWER.
On July 1, Zamora Inc. agreed to sell the assets of its Golfright Division to Benito Inc. for $71 million. The following additional facts pertain to the transaction: • The Golfrignt Division qualifies as a component of the entity according to GAAP regarding discontinued operations. • The book value of the Golfright's assets totaled $45 million on the date of the sale. Golfright's operating income was a pre-tax loss of $160 million in 2020. • Zamora's income tax rate is 40%. Suppose that the Golfright Division's assets had not been sold by December 31, 2020, but were considered held for sale. Assume that the fair value of these assets at December 31 was $71 million. Calculate the amount of loss from discontinued operations Zamora Inc. will report in the income statement for 2020. (Please input answer without the millions, i.e. 100 million would be entered as 100)
2.On Feb, 1, Johnson Co. agreed to sell the assets of its Formal Wear Division to Sun Hat Inc. The following additional facts pertain to the transaction: The Formal Wear Division qualifies as a component of the entity according to GAAP regarding discontinued operations. The book value of Formal Wear's assets totaled $48 million on December 31, 2021. Formal Wear's operating income was a pre-tax loss of $10 million in 2021. Tango's income tax rate is 25%. Suppose that the Formal Wear Division's assets had not been sold by December 31, 2021, but were considered held for sale. Assume that the fair value of these assets was $40 million at December 31, 2021. In the income statement for the year ended December 31, 2021, Tango Co. would report discontinued operations of: A) $7.5 million loss. B) $10.0 million loss. C) $18 million loss. D) $13.5 million loss. .
On September 17, 2024, Ziltech, Incorporated, entered into an agreement to sell one of its divisions that qualifies as a component of the entity according to generally accepted accounting principles. By December 31, 2024, the company's fiscal year - end, the division had not yet been sold, but was considered held for sale. The net fair value (fair value minus costs to sell) of the division's assets at the end of the year was $10 million. The pretax income from operations of the division during 2024 was $2 million. Pretax income from continuing operations for the year totaled $ 13 million. The income tax rate is 25 %. Ziltech reported net income for the year of $5.1 million. Required: Determine the book value of the division's assets on December 31, 2024.
On September 17, 2024, Ziltech, Incorporated, entered into an agreement to sell one of its divisions that qualifies as a component of the entity according to generally accepted accounting principles. By December 31, 2024, the company's fiscal year-end, the division had not yet been sold, but was considered held for sale. The net fair value (fair value minus costs to sell) of the division's assets at the end of the year was $11 million. The pretax income from operations of the division during 2024 was $4 million. Pretax income from continuing operations for the year totaled $14 million. The income tax rate is 25%. Ziltech reported net income for the year of $7.2 million. Required: Determine the book value of the division's assets on December 31, 2024. Note: Enter your answer in whole dollars and not in millions. For example, $4,000,000 rather than $4.