Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Accounting Basics Expert

Corrpro Companies, Inc., founded in 1984, provides corrosion control–related services, systems, equipment, and materials to the infrastructure, environmental, and energy markets. Corrpro’s products and services comprise (a) corrosion control engineering services, systems, and equipment, (b) coatings services, and (c) pipeline integrity and risk assessment services. The following information was abridged from the company’s March 31, 2011; Form 10-K. Assets and Liabilities Held for Sale In July 2010, the Company’s Board of Directors approved a formal business restructuring plan. The multi-year plan comprises a series of initiatives to perk up operating income and reduce debt. The Company intends to sell non-core business units and employ the proceeds to reduce debt. The Company has engaged outside professionals to help in disposition of the domestic and international non-core business units. Prior to quarter ended September 30, 2010, the Company’s non-core domestic and international units were reported as the Other Operations and International Operations reporting segments. Effective for quarter ended September 30, 2010, the Other Operations and International Operations reporting segments have been eliminated and the non-core domestic and international units are reported as discontinued operations. Prior year financial statements have been reclassified to reflect these non-core units as Discontinued operations, that are also referred to as “assets and liabilities held for sale.”

Consolidated Statements of Operations for the Years Ended March 31,

($ in 000s)                                                                              2011              2010                    2009
Revenues                                                                          $104,220          $123,058               $120,489
Operating costs and expenses
Cost of sales                                                                       71,607              87,326                    85,325
Selling, general, and administrative                                          29,788             32,327                    35,535
Operating income (loss)                                                          2,825               3,405                      (371)
Interest expense                                                                    5,907              5,055                      4,401
Loss from continuing operations
before income taxes                                                               (3,082)           (1,650)                   (4,772)
Provision (benefit) for income taxes                                          (331)            10,669                     (934)
Loss from continuing operations                                             (2,751)          (12,319)                   (3,838)
Discontinued operations
Loss from operations, net of taxes                                          (9,931)         (5,898)                     (4,443)
Gain on disposals, net of taxes                                                2,095                —                            —
Loss before cumulative effect of change in
accounting principle                                                               (10,587)          (18,217)                  (8,281)
Cumulative effect of change in
accounting principle                                                                (18,238)              —                           —
Net loss                                                                               $ (28,825)      $ (18,217)                   $ (8,281)

Required:

problem1. What criteria should be met to warrant reclassifying the non-core business units as discontinued operations effective with quarter ending September 30, 2010?

problem2. Assume that in March 2011 a buyer signed a buy commitment for Corrpro’s Rohrback Cosasco Systems division. This sale needs regulatory approval which is expected to take at least 18 months to get. Should Corrpro’s 2011 financial statements consist of this division in assets and liabilities held for sale? describe.

problem3. Suppose that in the February 2011 a potential buyer of another of domestic noncore business units insisted on a site assessment prior to signing a purchase commitment. The assessment’s purpose was to conclude whether the site was environmentally impaired. Unfortunately for Corrpro, trace amounts of a suspected carcinogen were discovered, causing the buyer to terminate the purchase. The buyer is willing to reconsider its decision if the site is remediated. While the site can be remediated using existing technology, doing so will be costly sufficient to negate the purpose of the sale, which is to increase funds to diminish debt. Management believes that employing new remediation methods currently being tested will make this sale economically feasible and thus places the sale of this business unit on hold. Should Corrpro’s 2011 financial statements comprise this division in Assets and liabilities held for sale?

problem4. Is there any purpose for management to prefer discontinued operations treatment for these noncore business units?

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M91159

Have any Question? 


Related Questions in Accounting Basics

Imagine you are the responsible accountant for one of our

Imagine you are the responsible accountant for one of our companies. Apart from local gaap or local accounting rules but with regard to HB II (Group financial statement) and with the help of the HB II accounting manual o ...

Consider the following scenarioandre has asked you to

Consider the following scenario: Andre has asked you to evaluate his business, Andre's Hair Styling. Andre has five barbers working for him. (Andre is not one of them.) Each barber is paid $9.90 per hour and works a 40-h ...

Assignment business analyticsthis assignment requires you

Assignment Business Analytics This Assignment requires you to use Excel in all three questions. Make sure you explain your answers and provide the regression output tables for questions 1 and 2. Submit your Assignment to ...

International accountingpart 1the weeks discussion covered

INTERNATIONAL ACCOUNTING PART 1 The week's discussion covered the following International Accounting Standards (IAS): #21 The Effects of Changes in Foreign Exchange Rates #27 Consolidated and Separate Financial Statement ...

Discussionpart 1 please respond the following question no

Discussion Part 1 please respond the following question no less then 350 words (original work, no plagiarism, 1 reference "free cash-flow valuations" please respond to the following: • Create an argument that use of the ...

Company annual report studychoose any company and make a

COMPANY ANNUAL REPORT STUDY Choose any company and make a report on financial report of company: David Jones Introduction (about 100 words) Conceptual framework (200 words) Critical analysis (200 words) Ethics (not more ...

Accounting questions1 if cash is 2345 in 20x2 and 3671 in

Accounting Questions 1. If Cash is $2,345 in 20X2 and $3,671 in 20X1, what is the percentage of increase or (decrease) from 20X1 to 20X2? A. 56.55%******* B. (56.55%) C. 36.12% D. (36.12%) 2. Gross profit by department a ...

Accounting assignmenttransfer pricing decisionsas a manager

Accounting Assignment Transfer Pricing Decisions As a manager, you may be tasked with making recommendations as to how your organization should structure its transfer pricing. This is especially true in cases when both v ...

Qestion 1beginning inventory24 tires 61purchase6 tires

QUESTION 1. Beginning inventory........24 tires @ $61 Purchase.........6 tires @ $76 Sale.......17 tires @ $105 Requirements 1. Compute cost of goods sold and gross profit under FIFO. 2. Compute cost of goods sold and gr ...

Question 1 owners of business firms are the only people who

Question 1 Owners of business firms are the only people who need accounting information. Question 2  Requiring employees to take vacations is a weakness in the system of internal controls because it does not promote oper ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro