In the 2011 income statement for foxtrot co. it would, Ask an Expert

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On May 1, Foxtrot Co. agreed to sell the assets of its Footwear Division to Albanese Inc. for $80 million. The sale was completed on December 31, 2011.

The following additional facts pertain to the transaction:

• The Footwear Division qualifies as a component of the entity according to GAAP regarding discontinued operations.
• The book value of Footwear's assets totaled $48 million on the date of the sale.
• Footwear's operating income was a pre-tax loss of $10 million in 2011.
• Foxtrot's income tax rate is 40%.

In the 2011 income statement for Foxtrot Co., it would report income from discontinued operations of:

a. $9.2 million.

b. $13.2 million.

c. $22 million.

d. $26 million.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M981463

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