Use the following to answer questions 8 through 10: On May 1, 2021, Jazzie Co. agreed to sell the assets of its Mister Division to Shawna Inc. for $80 million. The sale was completed on December 31, 2021. Jazzie’s year ends on December 31st. The following additional facts pertain to the transaction: The Mister Division qualifies as a component of an entity as defined by GAAP. Mister's net assets totaled $48 million on Jazzie's books at the time of the sale. Mister incurred a pre-tax operating loss of $10 million in 2021. Jazzie’s income tax rate is 40%. In the 2021 income statement for Jazzie Co., they would report after tax income from discontinued operations of: Group of answer choices $9.2 million. $13.2 million. $22 million. $26 million.

Use the following to answer questions 8 through 10: On May 1, 2021, Jazzie Co. agreed to sell the assets of its Mister Division to Shawna Inc. for $80 million. The sale was completed on December 31, 2021. Jazzie’s year ends on December 31st. The following additional facts pertain to the transaction: The Mister Division qualifies as a component of an entity as defined by GAAP. Mister's net assets totaled $48 million on Jazzie's books at the time of the sale. Mister incurred a pre-tax operating loss of $10 million in 2021. Jazzie’s income tax rate is 40%. In the 2021 income statement for Jazzie Co., they would report after tax income from discontinued operations of: Group of answer choices $9.2 million. $13.2 million. $22 million. $26 million.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter12: Intangibles

Section: Chapter Questions

Problem 9RE

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On May 1, 2021, Jazzie Co. agreed to sell the assets of its Mister Division to Shawna Inc. for $80 million. The sale was completed on December 31, 2021. Jazzie’s year ends on December 31st. The following additional facts pertain to the transaction: The Mister Division qualifies as a component of an entity as defined by GAAP. Mister's net assets totaled $48 million on Jazzie's books at the time of the sale. Mister incurred a pre-tax operating loss of $10 million in 2021. Jazzie’s income tax rate is 40%. Suppose that the Mister Division's assets had not been sold by December 31, 2021, but were considered held for sale. Assume that the fair value of these assets at December 31 was $80 million. In their 2021 income statement, Jazzie Co. would report for discontinued operations: Group of answer choices a $6 million after tax loss. a $10 million after tax loss after tax income of $13.2 million. after tax income of $22 million.
On May 1, 2021, Jazzie Co. agreed to sell the assets of its Mister Division to Shawna Inc. for $80 million. The sale was completed on December 31, 2021. Jazzie’s year ends on December 31st. The following additional facts pertain to the transaction: The Mister Division qualifies as a component of an entity as defined by GAAP. Mister's net assets totaled $48 million on Jazzie's books at the time of the sale. Mister incurred a pre-tax operating loss of $10 million in 2021. Jazzie’s income tax rate is 40%. Suppose that the Mister Division's assets had not been sold by December 31, 2021, but were considered held for sale. Assume that the fair value of these assets at December 31 was $40 million. In their 2021 income statement, Jazzie Co. would report for discontinued operations: Group of answer choices a $6 million after tax loss. a $10 million after tax loss. a $10.8 million after tax loss. an $18 million after tax loss.
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S On December 31, 2024, the end of the fiscal year, Revolutionary Industries completed the sale of its robotics business for $10.8 million The robotics business segment qualifies as a component of the entity, according to GAAP. Consider the following additional information: • The book value of the assets of the segment was $7.9 million at the time of the sale. • The income from operations of the segment during 2024 was $4.9 million. • Pretax income from other continuing operations for the year totaled $12.9 million. . The income tax rate is 25%. Prepare the lower portion of the 2024 income statement beginning with income from continuing operations before income taxes. Note: Loss amounts should be indicated with a minus sign. Enter your answers in whole dollars and not in millions. For example, $4,000,000 rather than $4. REVOLUTIONARY INDUSTRIES Partial Income Statement For the Year Ended December 31, 2024 Income from continuing operations before income taxes Income tax expense Income…
On January 1, 2021, Globe Company sold a piece of machinery to Troll Company for P1,900,000. Because of the entity’s commitments to its customers to provide their needs for the next three years, Globe Company simultaneously leased back the machinery. The transfer of the asset to the buyer qualifies to be accounted for as a sale under IFRS 15. Information relating to this transaction follows:• Fair value of machinery- P2,200,000• Carrying amount of machinery- P1,700,000• Remaining useful life of the machinery- 8 years• Lease term- 3 years• Annual rent payable at the end of each year, starting on December 31, 2021- P500,000• Market rate of interest- 10%• PV of an ordinary annuity of 1 at 10% for 3 periods is 2.4869• PV of an annuity due of 1 at 10% for 3 periods is 2.7355 How much is the gain on sale-leaseback? (round off your final answer to the nearest peso value)
On January 1, 2021, Globe Company sold a piece of machinery to Troll Company for P1,900,000. Because of the entity’s commitments to its customers to provide their needs for the next three years, Globe Company simultaneously leased back the machinery. The transfer of the asset to the buyer qualifies to be accounted for as a sale under IFRS 15. Information relating to this transaction follows:• Fair value of machinery- P2,200,000• Carrying amount of machinery- P1,700,000• Remaining useful life of the machinery- 8 years• Lease term- 3 years• Annual rent payable at the end of each year beginning, December 31, 2021- P500,000• Market rate of interest - 10%• PV of an ordinary annuity of 1 at 10% for 3 periods is 2.4869• PV of an annuity due of 1 at 10% for 3 periods is 2.7355 How much is the lease liability recorded on January 1, 2021?
On January 1, 2021, Globe Company sold a piece of machinery to Troll Company for P1,900,000. Because of the entity’s commitments to its customers to provide their needs for the next three years, Globe Company simultaneously leased back the machinery. The transfer of the asset to the buyer qualifies to be accounted for as a sale under IFRS 15. Information relating to this transaction follows:• Fair value of machinery- P2,200,000• Carrying amount of machinery- P1,700,000• Remaining useful life of the machinery- 8 years• Lease term- 3 years• Annual rent payable at the end of each year beginning, December 31, 2021- P500,000• Market rate of interest- 10%• The present value of an ordinary annuity of 1 at 10% for 3 periods is 2.4869. • The present value of an annuity due of 1 at 10% for 3 periods is 2.7355 How much is the interest expense for 2021 on the lease liability relating to the right retained in the sale-leaseback transaction? (round off your final answer to the nearest peso value)
A Corp. sold a machinery to a buyer for P1,900,000 on January 1, 2021. Because of the entity’s commitments to its customers to provide their needs for the next three years, A Corp. simultaneously leased back the machinery. The transfer of the asset to the buyer qualifies to be accounted for as a sale under IFRS 15. Information relating to this transaction follows: Fair value of machinery - P2,200,000 Carrying amount of machinery - P1,700,000 Remaining useful life of machinery - 8 years Lease term - 3 years Annual rent payable at the end of each year, starting on December 31, 2021 - P500,000 Market rate of interest - 10% (Round off the PV factor to four decimal places, then do not round off during the computation)How much is the Right of Use Asset at January 1, 2021? How much is the Gain on Sale-Leaseback?
On 1 January 2019, Bad Ltd acquired all the assets and liabilities of Wolf Ltd. Wolf Ltd has several operating divisions, including one whose major industry is the manufacture of toy trains, particularly those of historical significance. The toy trains division is regarded as a CGU. In paying $2 million for the net assets of Wolf Ltd, Bad Ltd calculated that it had acquired goodwill of $240 000. The goodwill was allocated to each of the divisions, and the assets and liabilities acquired meas-red at fair value at acquisition date. At 31 December 2021, the carrying amounts of the assets of the toy train division were: Factory $250 000 Inventory $150 000 Brand — ‘Froggy’ $50 000 Goodwill $50 000 Total 500 000 There is a declining interest in toy trains because of the aggressive marketing of computer-based toys, so the management of Bad Ltd measured the value in use of the toy train division at 31 December 2021, determining it to be $423 000.…
The individual financial statements for Gibson Company and Keller Company for the year ending December 31, 2021, follow. Gibson acquired a 60 percent interest in Keller on January 1, 2020, in exchange for various considerations totaling $1,050,000. At the acquisition date, the fair value of the noncontrolling interest was $700,000 and Keller’s book value was $1,400,000. Keller had developed internally a customer list that was not recorded on its books but had an acquisition-date fair value of $350,000. This intangible asset is being amortized over 20 years. Gibson uses the partial equity method to account for its investment in Keller. Gibson sold Keller land with a book value of $80,000 on January 2, 2020, for $180,000. Keller still holds this land at the end of the current year. Keller regularly transfers inventory to Gibson. In 2020, it shipped inventory costing $280,000 to Gibson at a price of $400,000. During 2021, intra-entity shipments totaled $450,000, although the original cost…