Exercise Algo Discontinued operations; disposal in subsequent year LO
Kandon Enterprises, Incorporated, has two operating divisions; one manufactures machinery and the other breeds and sells horses. Both divisions are considered separate components as defined by generally accepted accounting principles. The horse division has been unprofitable, and, on November Kandon adopted a formal plan to sell the division. The sale was completed on April At December the component was considered held for sale. Consider the following:
On December the companys fiscal yearend, the book value of the assets of the horse division was $ On that date, the fair value of the assets, less costs to sell, was $
The beforetax loss from operations of the division for the year was $
The aftertax income from continuing operations for was $
The companys effective tax rate is
Required:
Prepare a partial income statement for beginning with income from continuing operations. Ignore EPS disclosures.
Prepare a partial income statement for beginning with income from continuing operations. Assume that the estimated net fair value of the horse divisions assets was $ instead of $ Ignore EPS disclosures.
