WHAT IS THE POST-TAX LOSS FROM DISCONTINUED OPERATIONS FOR 2020 Presented below are the condensed income statement of Vital Corporation for the yearsended December 31, 2020 and 2019:20202019Sales5,000,000 4,900,0003,350,0001,650,000 1,600,000675,000975,000200,0001,175,000411.250763.750Cost of goods soldGross income3,300,000Operating expensesOperating income650,000950,000Gain on sale of division950,000332,500617,500Net income before income taxIncome tax expense (35%)Net incomeOn October 10, 2020, Chalangs entered into an agreement to sell the assets of one of itsgeographical segments. The geographical segment comprises operations and cash flowsthat can be clearly distinguished, operationally and for financial reporting purposes, fromthe rest of the company. The segment was sold on December 31, 2020, for P1,750,000.The book value of the segment's assets was P1,550,000. The segment's contribution toChalangs' operating income before tax for each year was as follows:2020113,750 loss81,250 income2019Assume that by December 31, 2020, the segment had not yet been sold but wasconsidered held for sale. The fair value of the segment's assets on December 31 wasP1,250,000. The post-tax loss from discontinued operations for 2020, based on theabove data, should be:

Reporting of assets of discontinued operations has to be done at the fair values.

Answered: Sales Cost of good Gross incom OsS

Business

Accounting

Sales Cost of good Gross incom OsS

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.

Question

WHAT IS THE POST-TAX LOSS FROM DISCONTINUED OPERATIONS FOR 2020

Presented below are the condensed income statement of Vital Corporation for the years
ended December 31, 2020 and 2019:
2020
2019
Sales
5,000,000 4,900,000
3,350,000
1,650,000 1,600,000
675,000
975,000
200,000
1,175,000
411.250
763.750
Cost of goods sold
Gross income
3,300,000
Operating expenses
Operating income
650,000
950,000
Gain on sale of division
950,000
332,500
617,500
Net income before income tax
Income tax expense (35%)
Net income
On October 10, 2020, Chalangs entered into an agreement to sell the assets of one of its
geographical segments. The geographical segment comprises operations and cash flows
that can be clearly distinguished, operationally and for financial reporting purposes, from
the rest of the company. The segment was sold on December 31, 2020, for P1,750,000.
The book value of the segment's assets was P1,550,000. The segment's contribution to
Chalangs' operating income before tax for each year was as follows:
2020
113,750 loss
81,250 income
2019
Assume that by December 31, 2020, the segment had not yet been sold but was
considered held for sale. The fair value of the segment's assets on December 31 was
P1,250,000. The post-tax loss from discontinued operations for 2020, based on the
above data, should be:

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