Question: During December 2010 Smythe Company decides to sell Division F

During December 2010, Smythe Company decides to sell Division F (a component of the company). On December 31, 2010, the company classifies Division F as held for sale. On that date, the book values of Division F’s assets and liabilities are $950,000 and $600,000, respectively. Smythe expects to sell Division F in 2011 and estimates that the fair value of Division F is $250,000. During 2010, Division F earned revenues of $1,000,000 and incurred expenses of $1,300,000. Smythe Company is subject to a 30% income tax rate.

Prepare the results from discontinued operations section of Smythe Company’s income statement for 2010. Show supporting calculations.

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  • CreatedDecember 09, 2013
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