1. (20 points) Kandon Enterprises, Inc., has two operating divisions; one manufactures machinery and the other breeds and sells horses. Both divisions are considered separate components as defined by generally accepted accounting principles. The horse division has been unprofitable, and on November 15, 2013, Kandon adopted a formal plan to sell the division. The safe was completed on April 30, 2014. On December 31, 2013, the component was considered held for sale. On December 31, 2013, the company's fiscal year-end, the book value of the assets of the horse division $250,000. On that date, the fair value of the assets, less costs to sell, was $200,000. The before-tax loss from operations of the division for the year was $140,000. The company's effective tax rate is 35%. The after-tax income from continuing operations for 2013 was $450,000. Prepare a partial income statement for 2013 beginning with income from continuing operations. KANDON ENTERPRISES, INC. Partial Income Statement For the Year Ended December 31, 2013 Income from continuing operations........ 1) $. Discontinued operations: Loss from operations of discontinued component Kincluding impairment loss ) 2) $C Income tax benefit.. 3) $ Net income......... 4) $ Assuming no impairment loss then: Income from continuing operations.... 5)$. Discontinued operations: Loss from operations of discontinued component....... 6) Income tax benefit ..... 7) $ Net income .... 8) $ Blank # 1 450,000 Blank # 2 190,000 Blank # 3 Blank #4 Blank # 5 Blank # 6 Blank # 7 Blank # 8 Page 1 of 4 Previous Page Next Page