In 2019, Roy Industries decided to discontinue its Laminating Division, a separately identifiable component of Roy's business. At December 31, 2019, the division has not been completely sold. However, negotiations for the final and complete sale are progressing in a positive manner, and it is probable that the disposal will be completed within a year. Analysis of the records for the year disclosed the following relative to the Laminating Division: Operating loss for the year Loss on disposal of some Laminating Division assets during 2019 Expected operating loss in 2020 preceding final disposal Expected gain in 2020 on disposal of division P899,000 50,000 450,000 200,000
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- On July 1, 2020, an entity decided to discontinue its Electronics Division, a separately identifiable component of business. On December 31,2020, the division has not been completely sold. However, negotiations for the final and complete sale are progressing in a positive manner and it is probable that the disposal will be completed within a year. Analysis of the records for the year disclosed the following data relative to the Electronics Division:Operating loss for 2020 8,000,000Loss on disposal of some Electronics Division assets during 2020 500,000Expected operating loss in 2021 preceding final disposal 1,000,000Expected gain in 2021 on disposal of division 2,000,000Income tax…19. In 2020, Roy Industries decided to discontinue its Laminating Division, a separately identifiable component of Roy's business. At December 31, 2020, the division has not been completely sold. However, negotiations for the final and complete sale are progressing in a positive manner, and it is probable that the disposal will be completed within a year. Analysis of the records disclosed the following:Operating loss for the year P899,000Loss on disposal of some assets during 2020 50,000Expected operating loss in 2021 450,000Expected gain in 2021 on disposal of division 200,000 Assuming a 35% tax rate, how much will be reported as loss from discontinued operations in Roy's 2020 income statement? P_________ Use the following information for the next two questions. Presented below are the condensed income statements ofRobert Corporation for the years ended…On November 1, 2021, Jamison Inc. adopted a plan to discontinue its barge division, which qualifies as a separate component of the business according to GAAP regarding discontinued operations. The disposal of the division was expected to be concluded by April 30, 2022. On December 31, 2021, the company's year-end, the following information relative to the discontinued division was accumulated: Operating loss Jan. 1–Dec. 31, 2021 $ 65 million Estimated operating losses, Jan. 1 to April 30, 2022 80 million Excess of fair value, less costs to sell, over book value at Dec. 31, 2021 15 million In its income statement for the year ended December 31, 2021, Jamison would report a before-tax loss on discontinued operations of: Multiple Choice $65 million. $50 million. $130 million. $145 million.
- On January 1, 2021, Concretti Inc. had a division that met the criteria for discontinuance of a business component. For the period January 1 through October 15, 2021, the component had revenue of P500,000 and expenses of P800,000. The assets of the component were sold on October 15, 2021 at a loss of P100,000. How should Concretti report the component's operation for 2021? A. 500,000 and 800,000 should be included in continuing operationsB. 400,000 should be reported as loss on discontinued operationsC. 400,000 should be reported as an extraordinary lossD. 300,000 should be reported as loss on discontinued operationsDexter Company has sustained heavy losses over a period time and conditions warrant that Dexter undergo a quasi re-organization at December 31, 2019. Selected balance sheet items prior write down and quasi-reorganization are as follows: • Property, plant and equipment were recorded in the accounting records at December 31, 2019, at P12,000,000, net of accumulated depreciation. The recoverable value is P8,000,000. • Stockholders' equity on December 31, 2019 was as follows: Ordinary share, par value P10 per share authorized, issued and outstanding 700,000 shares- P7,000,000; Share premium P1,600,000; Retained earnings (deficit)- (P600,000) • Under the terms of the quasi re-organization, the par value of the ordinary share is to be reduced from P10 per share to P5 per share Immediately after the quasi-reorganization has been accomplished, the total stockholders' equity should be:On December 1, 2021, Violet Company committed to a plan to dispose of the assets of a business component. The disposal meets the requirements to be classified as discontinued operation. On that date, the entity estimated that the loss from the disposition of the assets would be P700,000 and the component’s operating income was P200,000. What amount of pretax loss should be reported for discontinued operation for 2021?
- ABC Company has sustained heavy losses over a period time and conditions warrant that ABC undergo a quasi re-organization at December 31, 2019. Selected balance sheet items prior write down and quasi-reorganization are as follows:• Property, plant and equipment were recorded in the accounting records at December 31, 2019, at P12,000,000, net of accumulated depreciation. The recoverable value is P8,000,000.• Stockholders’ equity on December 31, 2019 was as follows: Ordinary share, par value P10 per share authorized, issued and outstanding 700,000 shares- P7,000,000; Share premium- P1,600,000; Retained earnings (deficit)- (P600,000)• Under the terms of the quasi re-organization, the par value of the ordinary share is to be reduced from P10 per share to P5 per shareImmediately after the quasi-reorganization has been accomplished, the total stockholders’ equity should be:On December 1, 2021, Violet Company committed to a plan to dispose of the assets of a business component. The disposal meets the requirements to be classified as discontinued operation. On that date, the entity estimated that the loss from the disposition of the assets would be P700,000 and the component’s operating income was P200,000. What amount of pretax loss should be reported for discontinued operation for 2021? A. 900,000 B. 700,000 C. 200,000 D. 500,000 E. None of themDuring 2019, White Company determined that machinery previously depreciated over a 7-year life had a total estimated useful life of only 5 years. An accounting change was made in 2019 to reflect the change in estimate. If the change had been made in 2018, accumulated depreciation at December 31, 2018, would have been 1,600,000 instead of 1,200,000. As a result of this change, the 2019 depreciation expense was 100,000 greater than it would have been if no change were made. Ignoring income tax considerations, what is the proper amount of the adjustment to Whites January 1, 2019, balance of retained earnings? a. 0 b. 100,000 c. 280,000 d. 400,000
- Manara Corporation acquired Sama Products on January 1, 2019 for $4,000,000, and recorded goodwill of $750,000 as a result of that purchase. At December 31, 2019, Sama Products had a carrying value of $3,500,000, Also, it is determined that the current recoverable amount value of the Sama division is $2,900,000 at that time. What amount of loss on impairment of goodwill should Manara record in 20197 OA S710,000 OB $600,000 OC S480,000 OD S0Sison Company reported profts of P4,000,000 and P8,000,000 in 2021 and 2022, respectively, In 2023, the following prior period errors were discovered: The inventory on December 31, 2021 was understated by P200,000. An equipment with an acquisition cost of P1,200,000 was erroneously charged as expense in 2021, The equipment has an estimated useful life of 5 years with no residual value. Sison Company provides full year depreciation in the year of acquisition. The unadjusted balance of retained earnings are P8,800,000 and P16,800,000 as of December 31, 2021 and 2022, respectively How much is the correct retained earnings in 2022?On November 30, 2016, Pearman Company committed to a plan to sell a division that qualified as a component of the entity according to GAAP, and was properly classified as held for sale on December 31, 2016, the end of the company’s fiscal year. The division was tested for impairment and a $400,000 loss was indicated. The division’s loss from operations for 2016 was $1,000,000. The final sale was expected to occur on February 15, 2017. What before-tax amount(s) should Pearman report as loss on discontinued operations in its 2016 income statement? a. $1,400,000 loss. b. $400,000 loss. c. None. d. $400,000 impairment loss included in continuing operations and a $1,000,000 loss from discontinued operations.