The income statement for Maxwell Ltd on December 31, 2021, of the entity before any adjustments...

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The income statement for Maxwell Ltd on December 31, 2021, of the entity before any adjustments for the asset held for sale was as follows: Revenue Operating Expenses Other Income Other Expenses Income tax expense Net income $1,950,000 $ 670,800 $ 14,300 $ 17,100 $ 306,336 970,064 On August 31, 2021, the company's board resolved to sell one of its three divisions in order to focus on further developing the other more successful divisions. The division to be held for sale had revenues of $365,400 and operating expenses of $310,800. These amounts are included in the above income statement. Assume Maxwell Ltd. has an income tax rate of 24%. Maxwell Ltd. has also noted that the Property, Plant and Equipment account of the division for sale holds capital assets with a book value of $1,380,000 as at August 31, 2021. The fair value of the PPE, $1,530,000. The cost to sell is 5% of the fair value. Required: Prepare a revised statement of income for the year ended December 31, 2021 in good form. (Hint: remember to calculate the gain/loss on discontinued operations) The income statement for Maxwell Ltd on December 31, 2021, of the entity before any adjustments for the asset held for sale was as follows: Revenue Operating Expenses Other Income Other Expenses Income tax expense Net income $1,950,000 $ 670,800 $ 14,300 $ 17,100 $ 306,336 970,064 On August 31, 2021, the company's board resolved to sell one of its three divisions in order to focus on further developing the other more successful divisions. The division to be held for sale had revenues of $365,400 and operating expenses of $310,800. These amounts are included in the above income statement. Assume Maxwell Ltd. has an income tax rate of 24%. Maxwell Ltd. has also noted that the Property, Plant and Equipment account of the division for sale holds capital assets with a book value of $1,380,000 as at August 31, 2021. The fair value of the PPE, $1,530,000. The cost to sell is 5% of the fair value. Required: Prepare a revised statement of income for the year ended December 31, 2021 in good form. (Hint: remember to calculate the gain/loss on discontinued operations)

Answer rating: 100% (QA)

To prepare the revised income statement for the year ended December 31 2021 we need to take into acc... View the full answer