On June 1, 2021, Startlet Company approved a plan to dispose of a business segment. It is expected that the sale will occur on April 30, 2022. On December 31, 2021, the carrying value of net assets of the segment was P4,000,000 and the net recoverable amount was P3,600,000. During 2021, the company paid employees severance and relocation costs of P200,000 as a direct result of the discontinuing operation. The revenues and expenses of the discontinuing segment during 2021 were: Revenue Expenses P4,000,000 1,800,000 Period covered January 1 to May 31 June 1 to December 31 P3,000,000 1,400,000 Income tax rate is 35%. What amount should be reported as loss from discontinued operation for 2021?
On June 1, 2021, Startlet Company approved a plan to dispose of a business segment. It is expected that the sale will occur on April 30, 2022. On December 31, 2021, the carrying value of net assets of the segment was P4,000,000 and the net recoverable amount was P3,600,000. During 2021, the company paid employees severance and relocation costs of P200,000 as a direct result of the discontinuing operation. The revenues and expenses of the discontinuing segment during 2021 were: Revenue Expenses P4,000,000 1,800,000 Period covered January 1 to May 31 June 1 to December 31 P3,000,000 1,400,000 Income tax rate is 35%. What amount should be reported as loss from discontinued operation for 2021?
Chapter8: Depreciation, Cost Recovery, Amortization, And Depletion
Section: Chapter Questions
Problem 29CE
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Transcribed Image Text:On June 1, 2021, Startlet Company approved a plan to dispose of a business segment.
It is expected that the sale will occur on April 30, 2022. On December 31, 2021, the
carrying value of net assets of the segment was P4,000,000 and the net recoverable
amount was P3,600,000. During 2021, the company paid employees severance and
relocation costs of P200,000 as a direct result of the discontinuing operation. The
revenues and expenses of the discontinuing segment during 2021 were:
Period covered
January 1 to May 31
June 1 to December 31
Revenue
P3,000,000
1,400,000
Expenses
P4,000,000
1,800,000
Income tax rate is 35%.
What amount should be reported as loss from discontinued operation for 2021?
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ISBN:
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Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT