Presented below are the condensed income statement of Vital Corporation for the years ended December 31, 2020 and 2019: 2020 5,000,000 4,900,000 3,350,000 3,300,000 1,650,000 1,600,000 675,000 975,000 200,000 1,175,000 411,250 763.750 2019 Sales Cost of goods sold Gross income Operating expenses Operating income Gain on sale of division 650,000 950,000 Net income before income tax Income tax expense (35%) 950,000 332,500 617.500 Net income On October 10, 2020, Chalangs entered into an agreement to sell the assets of one of its geographical segments. The geographical segment comprises operations and cash flows that can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the company. The segment was sold on December 31, 2020, for P1,750,000. The book value of the segment's assets was P1,550,000. The segment's contribution to Chalangs' operating income before tax for each year was as follows: 2020 2019 113,750 loss 81,250 income Assume that by December 31, 2020, the segment had not yet been sold but was considered held for sale. The fair value of the segment's assets on December 31 was P1,250,000. The post-tax loss from discontinued operations for 2020, based on the above data, should be:
Presented below are the condensed income statement of Vital Corporation for the years ended December 31, 2020 and 2019: 2020 5,000,000 4,900,000 3,350,000 3,300,000 1,650,000 1,600,000 675,000 975,000 200,000 1,175,000 411,250 763.750 2019 Sales Cost of goods sold Gross income Operating expenses Operating income Gain on sale of division 650,000 950,000 Net income before income tax Income tax expense (35%) 950,000 332,500 617.500 Net income On October 10, 2020, Chalangs entered into an agreement to sell the assets of one of its geographical segments. The geographical segment comprises operations and cash flows that can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the company. The segment was sold on December 31, 2020, for P1,750,000. The book value of the segment's assets was P1,550,000. The segment's contribution to Chalangs' operating income before tax for each year was as follows: 2020 2019 113,750 loss 81,250 income Assume that by December 31, 2020, the segment had not yet been sold but was considered held for sale. The fair value of the segment's assets on December 31 was P1,250,000. The post-tax loss from discontinued operations for 2020, based on the above data, should be:
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter9: Long-term Liabilities
Section: Chapter Questions
Problem 103.4C
Related questions
Question
Requirement:
1. Net income in 2019 and 2020.
2. Post-tax loss from discontinued operations for 2020.
Transcribed Image Text:Presented below are the condensed income statement of Vital Corporation for the years
ended December 31, 2020 and 2019:
2020
2019
Sales
5,000,000 4,900,000
3,350,000
1,650,000
675,000
975,000
200,000
1,175,000
411,250
763.750
3.300.000
1,600,000
650,000
950,000
Cost of goods sold
Gross income
Operating expenses
Operating income
Gain on sale of division
950,000
332,500
617.500
Net income before income tax
Income tax expense (35%)
Net income
On October 10, 2020, Chalangs entered into an agreement to sell the assets of one of its
geographical segments. The geographical segment comprises operations and cash flows
that can be clearly distinguished, operationally and for financial reporting purposes, from
the rest of the company. The segment was sold on December 31, 2020, for P1,750,000.
The book value of the segment's assets was P1,550,000. The segment's contribution to
Chalangs' operating income before tax for each year was as follows:
113,750 loss
81,250 income
2020
2019
Assume that by December 31, 2020, the segment had not yet been sold but was
considered held for sale. The fair value of the segment's assets on December 31 was
P1,250,000. The post-tax loss from discontinued operations for 2020, based on the
above data, should be:
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Fundamentals Of Financial Management, Concise Edi…
Finance
ISBN:
9781337902571
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
Intermediate Financial Management (MindTap Course…
Finance
ISBN:
9781337395083
Author:
Eugene F. Brigham, Phillip R. Daves
Publisher:
Cengage Learning