in 2019, Munder Difflin decided to sell its Sports Drink division (which produces Beetorade). The book...

   

Transcribed Image Text:

in 2019, Munder Difflin decided to sell its Sports Drink division (which produces Beetorade). The book value of the Sports Drink division's net assets is $85,000. The company had not yet completed the sale as of the end of 2019 and estimates the fair value of the Sports Drink division's net assets to be $73,000. Additionally, during FY 2019 Munder Difflin sells a factory, where it produces products for its Magic division. This factory has a net book value of $12,000 and was sold for $28,000. Munder Difflin will continue to produce products for its Magic division at other factories. Additional results for 2019 are provided below. The results for the Magic division below do not include the effects of the sale of the factory. Munder Difflin has an income tax rate of 20%. Income Before Income Tax Expense (FY 2019) Sports Drink Division Magic Division All Other Divisions 50,000 (3,000) 200,000 Using the information provided above, present Munder Diffilin's 2019 income statement starting from Income from Continuing Operations Before Taxes. You do not need to provide EPS calculations. (b) (1.5 pts) Gray Claw Inc. produces a variety of beverages. During 2019, Gray Claw decided to sell its non-alcoholic beverages division. The book value of the non-alcoholic beverages division assets and liabilities were $151,000 and $40,000, respectively. Gray Claw Inc. completed the sale of this division to Falsely Inc. in October 2019 for $99,000, and incurred legal fees of $4,000 associated with the sale. Information about Gray Claw's income is provided below. Gray Claw has an income tax rate of 25%. (Gray Claw's fiscal year end = December 31) Income Before Income Tax Expense (FY 2019) Non-alcoholic Beverages Division (50,000) All Other Divisions 440,000 Using the information provided above, present Gray Claw's 2019 income statement starting from Income from Continuing Operations Before Taxes. You do not need to provide EPS calculations. in 2019, Munder Difflin decided to sell its Sports Drink division (which produces Beetorade). The book value of the Sports Drink division's net assets is $85,000. The company had not yet completed the sale as of the end of 2019 and estimates the fair value of the Sports Drink division's net assets to be $73,000. Additionally, during FY 2019 Munder Difflin sells a factory, where it produces products for its Magic division. This factory has a net book value of $12,000 and was sold for $28,000. Munder Difflin will continue to produce products for its Magic division at other factories. Additional results for 2019 are provided below. The results for the Magic division below do not include the effects of the sale of the factory. Munder Difflin has an income tax rate of 20%. Income Before Income Tax Expense (FY 2019) Sports Drink Division Magic Division All Other Divisions 50,000 (3,000) 200,000 Using the information provided above, present Munder Diffilin's 2019 income statement starting from Income from Continuing Operations Before Taxes. You do not need to provide EPS calculations. (b) (1.5 pts) Gray Claw Inc. produces a variety of beverages. During 2019, Gray Claw decided to sell its non-alcoholic beverages division. The book value of the non-alcoholic beverages division assets and liabilities were $151,000 and $40,000, respectively. Gray Claw Inc. completed the sale of this division to Falsely Inc. in October 2019 for $99,000, and incurred legal fees of $4,000 associated with the sale. Information about Gray Claw's income is provided below. Gray Claw has an income tax rate of 25%. (Gray Claw's fiscal year end = December 31) Income Before Income Tax Expense (FY 2019) Non-alcoholic Beverages Division (50,000) All Other Divisions 440,000 Using the information provided above, present Gray Claw's 2019 income statement starting from Income from Continuing Operations Before Taxes. You do not need to provide EPS calculations.

Answer rating: 100% (QA)

Solution Munder Difflin Income Statement for the year ended 2019 Income ... View the full answer