Discontinued Operation Discontinued At The Beginning

7) Trunks Company decided to discontinue its Electronics Division, a separately identifiable component of business. On

December 31, 2023, the division has not been completely sold. However, negotiations for the final and complete sale are

progressing in a year. Analysis of the records for the year disclosed the following relative to the Electronics Division:

Operating loss for the year 8,000,000

Loss on disposal of some Electronics Division assets during 2023 500,000

Expected operating loss in 2024 preceding final disposal 1,000,000

Expected gain in 2024 on disposal of division 2,000,000

What amount should be reported as pretax loss from discontinued operation in 2023?

A. 9,500,000

B. 8,500,000

C. 8,000,000

D. 7,500,000

Discontinued Operation Discontinued During The Year

8) On May 1, 2022 Topak Company approved a plan to disclose of a business segment. It is expected that the sale will occur on

March 1, 2023. On December 31, 2022, the carrying amount of the net assets of the segment was P2,000,000 and the fair

value was P1,800,000. During 2022, the company paid employee severance and relocation costs of P100,000 as a direct result

of discontinued operation. Income tax rate is 30%. The revenues and expenses of the discontinued segment during 2022

were:

Revenue Expenses

January 1 to April 30 1,500,000 2,000,000

May 1 to December 31 700,000 900,000

How much will be reported as discontinued operation for the year 2022?

A. 700,000

B. 560,000

C. 350,000

D. 210,000