The Sakai Stores Corporation calculated its income before taxes and the loss on the sale of its shoe division but wants you to advise it on how to present this information to external users. Determine the after-tax loss from the shoe division and show how this information would be presented on the income statement. Explain in a brief memo to the owners why this information is shown this way on the income statement.

Transcribed Image Text:

Earnings before income taxes and Discontinued Operations $700,000 Tax rate 20% Loss on Discontinued Operations $250,000