The following condensed statement of income of Helen Corporation, a diversified company, is presented for the two
Question:
The following condensed statement of income of Helen Corporation, a diversified company, is presented for the two years ended December 31, 20X1 and 20X0:
On January 1, 20X1, 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, 20X1, and resulted in a pre-tax gain on disposition of $900,000. This division’s contribution to Helen’s reported income before taxes for each year was as follows:
20X1 ..................... $640,000 loss
20X0 ..................... $500,000 loss
Assume an income tax rate of 21%.
Required:
1. In preparing a revised comparative statement of income, Helen should report income from continuing operations after income taxes for 20X1 and 20X0, respectively, of how much?
2. Starting with the revised income from continuing operations numbers you obtained in requirement 1, prepare the revised comparative income statements for 20X1 and 20X0 showing appropriate details for gain (loss) from discontinued operations.
Step by Step Answer:
Financial Reporting And Analysis
ISBN: 9781260247848
8th Edition
Authors: Lawrence Revsine, Daniel Collins, Bruce Johnson, Fred Mittelstaedt, Leonard Soffer