4-7 and 4-8

208 SECTION 1 E 4-7 Income statement presentation discontinued operations, restructuring costs L04-1, L04-3 L04-4 The Role of Accounting as an Information System Esquire Comic Book Company hal income before tax of $1,000,0%) in 2018 before considering the following material items I. Esquire sold one of its operating divisions, which qualified as a separate component according to generally accepted accounting principles. The before tax loss on disposal was $350,000. The division generated before tax income from operations from the beginning of the year through disposal of SS00,000. Neither the loss on disposal or the operating income is included in the $1,000,000 before-tax income the company generated from its other divisions 2. The company incurred restructuring costs of $80,000 during the year Result Prepare a 2018 income statement for Esquire beginning with income from continuing operations. Assume an income tax rates of 40%. Ignore EPS disclosures Kandan Enterprises, Inc. has two operating divisions, one manufactures machinery and the other breeds and sells horses. Both divisions are considered separate components as defined by generally accepted accounting prin ciples. The horse division has been unprofitable and on November 15, 2018, Kandan tested a formal plan to well the division. The sale was completed on April 30, 2019 At Deceber 31, 2018, the component was considered held for sale On December 31, 2018, the company's fiscal year end the book value of the assets of the horse division $750.000. On that date, the fair value of the assets, less costs to sell, was $200,000. The before loss from oper ation of the division for the year was 110.000. The company effective tax rates 405 The after tat income from contiming operation for 2018 was $400,000 Discontinued operations, disposal in subsequent year L044 Prepare come statement for beginning with incung um conting operations Tour EPS iseloon 2 Repcat requirement auming that the estimated netfair value of the bone divisions was ins of sex000