Results of Discontinued Operations?
During December 2016, Smythe Company decides to sell Division F (a component of the company). On December 31, 2016, the company classifies Division F as held for sale. On that date, the book values of Division F's assets and liabilities are $950,000 and $600,000, respectively. Smythe expects to sell Division F in 2017 and estimates that the fair value of Division F is $250,000. During 2016, Division F earned revenues of $1,000,000 and incurred expenses of $1,300,000. Smythe is subject to a 30% income tax rate.
Required: 1. Compute the following for Division F of Smythe Company: a) Pretax income or loss from discontinued operations $ b) Income tax expense or credit for discontinued operations $ c) After tax income or loss from discontinued operations $ d) Pretax income or loss on write-down of Division F held-for-sale $ e) Income tax expense or credit for write-down of Division F held-for-sale $ f) After tax income or loss on write-down of Division F held-for-sale $ 2. Prepare the results from discontinued operations section of Smythe income statement for 2016. Results from discontinued operations: from operations of discontinued Division F $ on write-down of held-for-sale Division F $ Total $
- JudyLv 71 month ago
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