home / study / questions and answers / business / finance / on july 1, year 1, t

Question

home / study / questions and answers / business / finance / on july 1, year 1, the board of directors of all ...

Question

On July 1, Year 1, the board of directors of All Seasons Sports, Inc. voted to dispose of the Ski & Snowboard operating segment of the company. On that date, the carrying value of the segment was $3,000,000, but the Board believed that it could sell the segment for no more than $2,500,000. The company was committed to its plan to sell the segment and was actively looking for a buyer until April 1, Year 2, when the division was sold to We Love Winter, Inc. for a sales price of $3,200,000. All Seasons Sports paid a brokers fee of 10% of the sales price when the transaction was closed. Ski & Snowboard's operating results were as follows:

1/1/Year 1 – 6/30/Year 1 ($300,000)

7/1/Year 1 – 12/31/Year 1 ($400,000)

1/1/Year 2 – 3/31/Year 2 ($200,000)

All Seasons Sports has a tax rate of 30%.

Calculate the Gain/(Loss) from Discontinued Operations for Year 1 and Year 2:

Year 1 Year 2 Impairment Gain/(Loss)

Operating Gain/(Loss)

Gain/(Loss) on Disposal Income Tax Benefit/(Expense)

Total Gain/(Loss) from Discontinued Operations

Explanation / Answer

home / study / questions and answers / business / finance / on july 1, year 1, t

Related Questions

Navigate

• Browse (All)
• Browse H
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.