On November 1, 2016, Woods Company announced its plans to sell its subsidiary, Williams Division (a major
Question:
Woods is subject to a 30% income tax rate.
On December 31, 2016, 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 2016.
Required:
1. Prepare the journal entry on December 31, 2016, to record the pretax loss on held-for-sale Williams Division. Show supporting calculations.
2. Prepare a 2016 multiple-step income statement for Woods.
3. Show how Williams Division would be reported on Woods€™s December 31, 2016, balance sheet.
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...
Step by Step Answer:
Intermediate Accounting Reporting and Analysis
ISBN: 978-1285453828
2nd edition
Authors: James M. Wahlen, Jefferson P. Jones, Donald Pagach