Play Cloth Company, a retailer of children's clothing, decided to dispose of its European division. The company
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Question:
Play Cloth Company, a retailer of children's clothing, decided to dispose of its European division. The company announced the plan to sell the division on March X Once the announcement was made, management hired a professional services firm to assist with finding a buyer for the division. The firm would charge commission on the sale of the division.
The European division had a carrying value of $ and was listed for sale at a price of $ The sale price was determined in reference to an independent fair value appraisal.
The division earned $ from July X March X and $ between March X June X
On June X an appraisal indicated that the fair value of the division was approximately $
Play Cloth had total earnings from continuing operations after tax of $ for the year ended June X
Play Cloth has a tax rate of
Required:
Determine whether the European division qualifies as a discontinuedoperation
Related Book For
Intermediate Accounting Volume 1
ISBN: 9781260881233
8th Edition
Authors: Thomas H. Beechy, Joan E. Conrod, Elizabeth Farrell, Ingrid McLeod-Dick, Kayla Tomulka, Romi-Lee Sevel
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