Question

QUESTION 20 On 11/1/19, Quarles Inc. adopted a plan to discontinue its barge division. The company...

QUESTION 20

  1. On 11/1/19, Quarles Inc. adopted a plan to discontinue its barge division. The company plans to sell the division on 4/30/20, but the division is not sold as of 12/31/19, the company's year end. On 12/31/19, the following information regarding the discontinued division is accumulated:


    Operating loss of the division for the year     $65 million
    Fair value of division                                      $25 million

    Book value of division                                    $30 million

    Additional Information: Quarles’ effective tax rate is 25%.


    Quarles would report in its 2019 multiple-step income statement a loss on discontinued operations of:

    A.

    $52.5 million.
    B.

    $70 million.
    C.

    $65 million.
    D.

    $48.75 million.
Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1
Quales Inc $ in million
Statement of Comprehensive Income-(Extract)
For the year ended December 31, 2019
Discontinued Operation
Operating Loss from discontinued operation $   65.00
Loss on disposal of discontinued operation(30-25) $      5.00
Less: Tax Benefit from loss on discontinued operation
(65+5)*25%		 $ (17.50)
Total Loss from discontinued operation $ 52.50
The correct answer is option (A)
Please do upvote if you found the answer useful.
Feel free reach in the comment section in case of any clarification or queries.
0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
On November 1, 2021, Warren Co. adopted a plan to discontinue its barge division, which qualifies...
On November 1, 2021, Warren Co. adopted a plan to discontinue its barge division, which qualifies as a separate component of the business according to GAAP regarding discontinued operations. The disposal of the division was expected to be concluded by April 30, 2022. On December 31, 2021, the company's year-end, the following information relative to the discontinued division was accumulated: Operating loss Jan. 1–Dec. 31, 2021 $ 74 million Estimated operating losses, Jan. 1 to April 30, 2022 96 million...
On September 1, 2021, Jolie Inc. committed to a plan to sell a division that qualified...
On September 1, 2021, Jolie Inc. committed to a plan to sell a division that qualified as a component of the entity according to GAAP regarding discontinued operations and was properly classified as held for sale on December 31, 2021, the end of the company's fiscal year. The division's loss from operations for 2021 was $1,950,000. The division's book value and fair value less cost to sell on December 31 were $2,970,000 and $3,580,000, respectively. What before-tax amount(s) should Jolie...
Avalia Ltd. decided on January 1, 2019 to discontinue its plastic-making division. The division, properly identified...
Avalia Ltd. decided on January 1, 2019 to discontinue its plastic-making division. The division, properly identified as a reportable segment, was sold on June 1, 2019. Division assets with a carrying value of $1,600,000 were sold for $1,000,000. Operating income from January 1, to May 30, 2019 for the division amounted to $250,000. Income taxes are at the rate of 30%. What amount should be reported on Avalia's income statement for the year ended December 31, 2019 under the caption...
On October 28, 2021, a company committed to a plan to sell a division that qualified...
On October 28, 2021, a company committed to a plan to sell a division that qualified as a component of the entity according to GAAP regarding discontinued operations and was properly classified as held for sale on December 31, 2021, the end of the company's fiscal year. The division's loss from operations for 2021 was $1,990,000. The division's book value and fair value less cost to sell on December 31 were $2,940,000 and $3,620,000, respectively. What before-tax amount(s) should the...
On October 28, 2018, Mercedes Company committed to a plan to sell a division that qualified...
On October 28, 2018, Mercedes Company committed to a plan to sell a division that qualified as a component of the entity according to GAAP regarding discontinued operations and was properly classified as held for sale on December 31, 2018, the end of the company's fiscal year. The division's loss from operations for 2018 was $1,960,000. The division's book value and fair value less cost to sell on December 31 were $2,890,000 and $3,550,000, respectively. What before-tax amount(s) should Mercedes...
On October 28, 2013, Mercedes Company committed to a plan to sell a division that qualified...
On October 28, 2013, Mercedes Company committed to a plan to sell a division that qualified as a component of the entity according to GAAP regarding discontinued operations and was properly classified as held for sale on December 31, 2013, the end of the company's fiscal year. The division's loss from operations for 2013 was $2,000,000. The division's book value and fair value less cost to sell on December 31 were $3,000,000 and $2,500,000, respectively. What before-tax amount(s) should Mercedes...
On July 1, 2020, Premier Publishing Company decided to discontinue their "Book Publishing Division". On ล...
On July 1, 2020, Premier Publishing Company decided to discontinue their "Book Publishing Division". On ล Pre-Tax basis, the Book Publishing Division had an operating loss of $ 400,000 from January 1st throughJune 30th, and was anticipated to lose an additional $ 600,000 from July 1, 2020 through December 31, 2020. The carrying value of the Net Assets of the Book Publishing Division is $ 10,000,000, and the investment banker hired by Premier believes that the division will be sold...
Which of the following most likely would be classified as restructuring costs? Multiple Choice Acquisition fees...
Which of the following most likely would be classified as restructuring costs? Multiple Choice Acquisition fees associated with the purchase of land and buildings. Brokerage fees from the issuance of additional shares of stock. Advertising costs to sell a product recently developed by a company. Severance pay for employee layoffs associated with facility closings. Excerpts from Dowling Company's December 31, 2021 and 2020, financial statements and key ratios are presented below (all numbers are in millions): 2021 2020 Accounts receivable...
On October 1, 2017 LeBron Co. agreed to sell the assets of its Heat Division to...
On October 1, 2017 LeBron Co. agreed to sell the assets of its Heat Division to Cavalier Inc. for $80 million. The sale was completed on December 31, 2017. The following additional facts pertain to the transaction: The Heat Division qualifies as a component of the entity according to GAAP regarding discontinued operations. The book value of Heat's assets totaled $74 million on the date of the sale. Heat's operating income was a pre-tax loss of $3.5 million in 2017....
***PLEASE ANSWER ALL QUESTIONS** 3. On October 28, 2021, a company committed to a plan to...
***PLEASE ANSWER ALL QUESTIONS** 3. On October 28, 2021, a company committed to a plan to sell a division that qualified as a component of the entity according to GAAP regarding discontinued operations and was properly classified as held for sale on December 31, 2021, the end of the company's fiscal year. The division's loss from operations for 2021 was $2,000,000. The division's book value and fair value less cost to sell on December 31 were $3,000,000 and $2,500,000, respectively....
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT