50.1K

Verified Solution

Link Copied!

Current Attempt in Progress

On November $1,2022,$ Crane Corporation management decided to discontinue operation of its Rocketeer Division and approved a

formal plan to dispose of the division. Crane is a successful corporation with earnings of $$210\mathrm{.}00$ million or more before tax for each

of the past five years. The Rocketeer Division, a major part of Crane's operations, is being discontinued because it has not contributed

to this profitable performance.

The division's main assets are the land, building, and equipment used to manufacture engine components. The land, building, and

equipment had a net book value of $$58\mathrm{.}90$ million on November $1,2022.$

Crane's management has entered into negotiations for a cash sale of the division for $$50\mathrm{.}40$ million $($net of costs to selll. The sale date

and final disposal date of the division is expected to be July $1,2023.$ Crane has a fiscal year ending May $31.$ The results of operations

for the Rocketeer Division for the $2022-2023$ fiscal year and the estimated results for June $2023$ are presented below. The before$-$

tax losses after October $31,2022,$ are calculated without depreciation on the building and equipment.

The Rocketeer Division will be accounted for as a discontinued operation on Crane's financial statements for the year ended May $31,$

Crane's tax rate is $25\%$ on operating income and all gains and losses. Crane prepares financial statements in accordance with

IFRS.

$($b$)$

Your answer is correct.

Indicate how the discontinued operations and pending sale of the Rocketeer Division would be reported on Crane's income

statement for the year ended Mary $31,2023.($Enter negative amounts using either a negative sign preceding the number e$.$g$.-45$ or

parentheses e$.$g$.(45))$

Income from Continuing Operations

Discontinued Operations:

$[$

Answer & Explanation Solved by verified expert

See Answer