Chapter 4 The Income Statement and Statement of Cash Flows26

Chapter 4 The Income Statement and Statement of Cash Flows26

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Exercise 4-7 Requirement 1 KANDON ENTERPRISES, INC. Partial Income Statement For the Year Ended December 31, 2011 Income from continuing operations . ................................... $ 400,000 Discontinued operations: Loss from operations of discontinued component (including impairment loss of $50,000) * .............................. (190,000) Income tax benefit. ............................................................ 76,000 Loss on discontinued operations . ...................................... (114,000 ) Net income . ......................................................................... $ 286,000 * Loss on discontinued operations: Operating loss $(140,000) Impairment loss ($250,000 - 200,000) (50,000 ) Net before-tax loss (190,000) Income tax benefit (40%)
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Unformatted text preview: 76,000 Net after-tax loss on discontinued operations $(114,000 ) Requirement 2 KANDON ENTERPRISES, INC. Partial Income Statement For the Year Ended December 31, 2011 Income from continuing operations . ................................... $ 400,000 Discontinued operations: Loss from operations of discontinued component * ......... (140,000) Income tax benefit . ........................................................... 56,000 Loss on discontinued operations . ...................................... (84,000 ) Net income . ......................................................................... $ 316,000 * Includes only the operating loss during the year. There is no impairment loss....
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Chapter 4 The Income Statement and Statement of Cash Flows26

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