On November 1, 2013, Woods Company announced its plans to sell its subsidiary, Williams Division (a component

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On November 1, 2013, Woods Company announced its plans to sell its subsidiary, Williams Division (a component of the company). By December 31, 2013, Woods had not sold Williams

Division and so it classifies the division as held for sale.

During 2013, Woods recorded the following revenues and expenses for Williams Division and the remainder of the company:

On November 1, 2013, Woods Company announced its plans to

Woods is subject to a 30% income tax rate.
On December 31, 2013, the net book value of Williams Division is $500,000, consisting of assets of $910,000 and liabilities of $410,000. On this date, Woods estimates that the fair value of Williams Division is $420,000. The company had 50,000 shares of common stock outstanding during all of 2013.
Required:
1. Prepare the journal entry on December 31, 2013, to record the pretax loss on held-for-sale Williams Division. Show supporting calculations
2. Prepare a 2013 multiple-step income statement for Woods.
3. Show how Williams Division would be reported on Woods's December 31, 2013, balance sheet.

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...
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Related Book For  book-img-for-question

Intermediate Accounting Reporting and Analysis

ISBN: 978-1111822361

1st edition

Authors: James M. Wahlen, Jefferson P. Jones, Donald Pagach

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