On August 1, 20x1, Rocket Retailers adopted a plan to discontinue its children's clothing division, which...

  

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On August 1, 20x1, Rocket Retailers adopted a plan to discontinue its children's clothing division, which qualifies as a component of the business according to GAAP. The disposal of the division was expected to be concluded by June 30, 20x2. On December 31, 20x1, Rocket's fiscal year-end, the following information relative to the discontinued operation was accumulated: Operating Income (pre-tax) Jan 1, 20x1 - Dec 31, 20x1 438,000 Estimated Operating Income (pre-tax) Jan 1, 20x2 – June 30, 20x2 180,000 Net Book Value of the Component 2,750,000 Fair Value of the Component 2,500,000 Estimated Disposal Costs 100,000 Income Tax Rate 21% Because the sale was not complete by December 31, 20x1, Rocket had to test the component for impairment. Determine the Impairment Loss (net of tax), that Rocket would report in their 20x1 footnotes (if any): *If an impairment loss is indicated, just record your answer as a positive number. Do not use commas or dollar signs. Example: If you determine there is an Impairment Loss of 100,000 (pretax), enter your answer as 79000. Remember, your answer should be reported after tax of 21% has been deducted. On August 1, 20x1, Rocket Retailers adopted a plan to discontinue its children's clothing division, which qualifies as a component of the business according to GAAP. The disposal of the division was expected to be concluded by June 30, 20x2. On December 31, 20x1, Rocket's fiscal year-end, the following information relative to the discontinued operation was accumulated: Operating Income (pre-tax) Jan 1, 20x1 - Dec 31, 20x1 438,000 Estimated Operating Income (pre-tax) Jan 1, 20x2 – June 30, 20x2 180,000 Net Book Value of the Component 2,750,000 Fair Value of the Component 2,500,000 Estimated Disposal Costs 100,000 Income Tax Rate 21% Because the sale was not complete by December 31, 20x1, Rocket had to test the component for impairment. Determine the Impairment Loss (net of tax), that Rocket would report in their 20x1 footnotes (if any): *If an impairment loss is indicated, just record your answer as a positive number. Do not use commas or dollar signs. Example: If you determine there is an Impairment Loss of 100,000 (pretax), enter your answer as 79000. Remember, your answer should be reported after tax of 21% has been deducted.

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Carrying Cost Net Boolk uolue 2750000 fau... View the full answer