On December 31, 2016, the end of the fiscal year, California Microtech Corporati

Question

On December 31, 2016, the end of the fiscal year, California Microtech Corporation completed the sale of its semiconductor business for $17 million. The business segment qualifies as a component of the entity according to GAAP The book value of the assets of the segment was $16 million The loss from operations of the segment during 2016 was $4.6 million. Pretax income from continuing operations for the year totaled $6.7 million. The income tax rate is 30%. Prepare the lower portion of the 2016 income statement beginning with pretax income from continuing operations. Ignore EPS disclosures.

Explanation / Answer

(In Millions) Income from continuing operations before income taxes 6.70 Less:Income taxes @30% 2.01 Income from continuing operations 4.69 Discontinued operations Loss from operations of discontinued business component -4.60 Income tax benefit 1.38 Loss on discontinued operations -3.22 Net income 1.47

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