Leigh Corp. disposed of its Knit Products Division in June of 2020 at a loss...
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Leigh Corp. disposed of its Knit Products Division in June of 2020 at a loss of $106,400 before tax. Prior to the sale, the Knit Products Division (considered a separate business component) reported a net loss from operations of $1,134,000 before tax. Leigh Corp. reported income from continuing operations of $2,520,000 before tax for 2020. a. Assuming an income tax rate of 25%, prepare an income statement beginning with Income from Continuing Operations. Ignore earnings per share disclosures. Use a negative sign to indicate a loss. $ 2,252,000 Leigh Corp. Income Statement June 2020 Income from continuing operations Discontinued operations Loss from discontinued operations, net of tax savings Loss on disposal of discontinued operations, net of tax savings Net income (1,134,000) (106,400) 1,011,600 b. Repeat the requirements of part a but now assume that the Knit Products Division reported income from operations of $224,000 in 2020. Use a negative sign to indicate a loss. 224,000 Leigh Corp Income Statement June 2020 Income from continuing operations Discontinued operations Income from discontinued operations, net of tax Loss on disposal of discontinued operations, net of tax savings Net income (1,134,000) (106,400) $(1353,800)
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