On January 1, 2020, Power Corporation approved a plan to dispose of a business segment. It is
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Question:
On January 1, 2020, Power Corporation approved a plan to dispose of a business segment. It is expected that the sale will occur on April 30, 2021. On December 31, 2020, the carrying value of the net assets of the segments was P4,000,000 and the net recoverable amount was P3,600,000. During 2016, the company paid employees severance and relocation costs of P200,000 as a direct result of the discontinued operations. The revenues and expenses of the discontinued segment during 2020 were as follows: (Income tax rate is 35%)
Revenue 4,400,000 Expense 5,800,000
How much will be reported as income from ordinary activities of the discontinued operations, net of tax in 2021?
a. 260,000
b. 455,000
c. 520,000
d. 845,000
Expert Answer:
Step 1 Total Expense 5800000 Less Revaluation Loss 400000 3600000 400000 Less Severance an... View the full answer
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