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Ortiz Co.had income from continuing operations of $1,600,000 in 2018. During 2018, it disposed of its...

Ortiz Co.had income from continuing operations of $1,600,000 in 2018. During 2018, it disposed of its restaurant division at an after-tax loss (net of tax savings) of $190,000. Prior to disposal, the division operated at an income of $320,000 (net of tax) in 2018 (assume that the disposal of the restaurant division meets the criteria for recognition as a discontinued operation).

What is the net income for the year ended 31\12\2018

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Answer #1

Income from continuing operations = $1,600,000

Loss on disposal of retaurant division, net of tax = $190,000

Gain on operations of restaurant division, net of tax = $320,000

Income Statement

Income from continuing operations

1,600,000

Discontinued operations :
Gain on operations of restaurant division, net of tax

320,000

Loss on disposal of retaurant division, net of tax

 -190,000

130,000

Net income

$1,730,000

Net income for the year ended 31\12\2018 = $1,730,000

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