Question: The following condensed statement of income of Helen Corporation a

The following condensed statement of income of Helen Corporation, a diversified company, is presented for the two years ended December 31, 2014 and 2013:

On January 1, 2014, Helen entered into an agreement to sell for $3,200,000 the assets and product line of one of its separate operating divisions. The sale was consummated on December 31, 2014, and resulted in a gain on disposition of $900,000. This division’s contribution to Helen’s reported income before taxes for each year was as follows:
2014 ...... $640,000 loss
2013 ...... $500,000 loss
Assume an income tax rate of 50%.

1. In preparing a revised comparative statement of income, Helen should report income from continuing operations after income taxes for 2014 and 2013, respectively, amounting to how much?
2. Starting with the revised income from continuing operations numbers you obtained in requirement 1, prepare the revised comparative income statements for 2014 and 2013 showing appropriate details for gain (loss) from discontinuedoperations.
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  • CreatedSeptember 10, 2014
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