Example 4-1 Which of the following situations would be eligible for discontinued business treatment? a) ) A manufacturer that also owns retail stores decides to sell the retail outlets to a facilities. After the sale, the manufacturer will still sell product to the buyer of the stores. are not "given away." basis to minimize packaging charges. The past losses from selling packaged bars are very significant. n independent party but keep the manufacturing ts its US outlets up for sale due to the recession. The asking price includes a "market premium to ensure that the outlets company that sells individual chocolate bars to major grocery chains has changed its strategy and will now sell its products on a "bulk Example 4-2 The Milton Hotel chain has a hotel in Toronto that was experiencing a pre-tax monthly loss of $1,300,000 including depreciation of $500,00. In November 20x1, management decided to sell the hotel. Its carrying amount at that time was $80 million. It is now February 20x2 and the 20X1 financial statements are about to be finalized. Milton has received a tentative offer of $60 million and it is likely that management will accept the offer, after approving the year-end financial statements. In February, Milton paid legal and other costs relating to the sale of the hotel amounting to $100,000. The buyer is expecting Milton to lay off some of the staff and incur severance costs of $1,900,000. What should Milton show on its income statement for the year ended December 31, 20x1 if the tax rate is 30%