On July 1, Year 1, the board of directors of All Seasons Sports, Inc. voted to dispose
Question:
On July 1, Year 1, the board of directors of All Seasons Sports, Inc. voted to dispose of the Ski & Snowboard operating segment of the company. On that date, the carrying value of the segment was $3,000,000, but the Board believed that it could sell the segment for no more than $2,500,000. The company was committed to its plan to sell the segment and was actively looking for a buyer until April 1, Year 2, when the division was sold to We Love Winter, Inc. for a sales price of $3,200,000. All Seasons Sports paid a brokers fee of 10% of the sales price when the transaction was closed.
Ski & Snowboard's operating results were as follows:
1/1/Year 1 – 6/30/Year 1 | ($300,000) | |
7/1/Year 1 – 12/31/Year 1 | ($400,000) | |
1/1/Year 2 – 3/31/Year 2 | ($200,000) |
All Seasons Sports has a tax rate of 30%.
Calculate the Gain/(Loss) from Discontinued Operations for Year 1 and Year 2:
Modern Advanced Accounting in Canada
ISBN: 978-1259087554
7th edition
Authors: Hilton Murray, Herauf Darrell