Question
ABC Co. decided on March 3, 2020 to dispose of their Widget Segment. The sale of the segment was completed on November 13, 2020. The
ABC Co. decided on March 3, 2020 to dispose of their Widget Segment. The sale of the segment was completed on November 13, 2020. The disposal of this segment qualifies as a discontinued operation. Income Statement data for ABC for calendar years 2018-2020 are as follows:
2020 2019 2018
Sales $3,000,000 $2,700,000 $2,500,000
Cost of goods sold 1,800,000 1,593,000 1,525,000
Operating expenses 700,000 680,000 650,000
These amounts include the operating results for the Widget Segment through its disposal on November 13, 2020. Income Statement data for the Widget Segment separately for 2018-2020 are as follows:
2020 2019 2018
Sales $450,000 $600,000 $700,000
Cost of goods sold 315,000 408,000 455,000
Operating expenses 120,000 150,000 130,000
The book value of the assets and liabilities of Widget on November 13, 2020 was 4,800,000. The sales price was 6,210,000. ABC has a tax rate of 21% for all years and had 150,000 shares of common stock outstanding for all years.
Required: Prepare, in good form, complete comparative Income Statements for ABC for the years 2018-2020.
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