Exercise 4 04 a On October 5, 2020, Diamond in the Sheffield Recruiting Group Inc s board of directors decided to dispose of the Blue Division A formal plan was approved Diamond derives approximately 77 of its income from its human resources management practice The Blue Division gets contracts to perform human resources management on an outsourced basis The board decided to dispose of the division because of unfavourable operating results Net income for Diamond was $93,870 for the fiscal year ended December 31, 2020 (after a charge for tax at 30 and after a writedown for the Blue assets) Income from operations of the Blue Division accounted for $4,970 (after tax) of this amount Because of the unfavourable results and the extreme competition, the board believes that it cannot sell the business intact Its final decision is to auction off the office equipment The equipment is the divisions only asset and has a carrying value of $24,000 at October 5, 2020 The board believes that proceeds from the sale will be approximately $6,000 after the auction expenses Currently, the equipments estimated fair value is $9,600 The Blue Division qualifies for treatment as a discontinued operation Diamond prepares financial statements in accordance with ASPE (a) Prepare a partial income statement for Diamond in the Sheffield Recruiting Group The income statement should begin with income from continuing operations before income tax (Enter negative amounts using either a negative sign preceding the number e g 45 or parentheses e g (45) ) Diamond in the Sheffield Recruiting Group Inc Partial Income Statement For the Year Ended December 31, 2020December 31, 2020For the Month Ended December 31, 2020 Income from Continuing Operations before Income TaxNet Income (Loss)Income Tax ExpenseApplicable Income TaxIncome from Continuing OperationsDiscontinued operationsLoss from impairment of assets of Discontinued operations, less Applicable Income Tax RecoveryIncome from Operations of the Discontinued Blue Division, less Applicable Income TaxApplicable Income Tax Recovery $ Income Tax Expense Income from Continuing Operations Income from Operations of the Discontinued Blue Division, less Applicable Income Tax Loss from impairment of assets of Discontinued operations, less Applicable Income Tax Recovery Discontinued operations Applicable Income Tax Applicable Income Tax Recovery Net Income (Loss) Income from Continuing Operations before Income Tax Loss from impairment of assets of Discontinued operations, less Applicable Income Tax RecoveryIncome from Continuing Operations before Income TaxApplicable Income TaxIncome from Operations of the Discontinued Blue Division, less Applicable Income TaxDiscontinued operationsApplicable Income Tax RecoveryNet Income (Loss)Income from Continuing OperationsIncome Tax Expense Income from Operations of the Discontinued Blue Division, less Applicable Income TaxApplicable Income Tax RecoveryIncome Tax ExpenseNet Income (Loss)Loss from impairment of assets of Discontinued operations, less Applicable Income Tax RecoveryIncome from Continuing Operations before Income TaxIncome from Continuing OperationsApplicable Income TaxDiscontinued operations Discontinued operationsIncome from Operations of the Discontinued Blue Division, less Applicable Income TaxIncome from Continuing OperationsNet Income (Loss)Income Tax ExpenseApplicable Income TaxLoss from impairment of assets of Discontinued operations, less Applicable Income Tax RecoveryIncome from Continuing Operations before Income TaxApplicable Income Tax Recovery $ Income from Operations of the Discontinued Blue Division, less Applicable Income TaxNet Income (Loss)Income from Continuing Operations before Income TaxApplicable Income TaxApplicable Income Tax RecoveryLoss from impairment of assets of Discontinued operations, less Applicable Income Tax RecoveryIncome from Continuing OperationsIncome Tax ExpenseDiscontinued operations Income from Continuing Operations before Income TaxApplicable Income TaxIncome from Continuing OperationsIncome Tax ExpenseLoss from impairment of assets of Discontinued operations, less Applicable Income Tax RecoveryDiscontinued operationsIncome from Operations of the Discontinued Blue Division, less Applicable Income TaxApplicable Income Tax RecoveryNet Income (Loss)

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Exercise 4-04 a On October 5, 2020, Diamond in the Sheffield Recruiting Group Inc.s board of directors decided to dispose of the Blue Division. A

Exercise 4-04 a

On October 5, 2020, Diamond in the Sheffield Recruiting Group Inc.s board of directors decided to dispose of the Blue Division. A formal plan was approved. Diamond derives approximately 77% of its income from its human resources management practice. The Blue Division gets contracts to perform human resources management on an outsourced basis. The board decided to dispose of the division because of unfavourable operating results. Net income for Diamond was $93,870 for the fiscal year ended December 31, 2020 (after a charge for tax at 30% and after a writedown for the Blue assets). Income from operations of the Blue Division accounted for $4,970 (after tax) of this amount. Because of the unfavourable results and the extreme competition, the board believes that it cannot sell the business intact. Its final decision is to auction off the office equipment. The equipment is the divisions only asset and has a carrying value of $24,000 at October 5, 2020. The board believes that proceeds from the sale will be approximately $6,000 after the auction expenses. Currently, the equipments estimated fair value is $9,600. The Blue Division qualifies for treatment as a discontinued operation. Diamond prepares financial statements in accordance with ASPE. (a) Prepare a partial income statement for Diamond in the Sheffield Recruiting Group. The income statement should begin with income from continuing operations before income tax. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Diamond in the Sheffield Recruiting Group Inc. Partial Income Statement For the Year Ended December 31, 2020December 31, 2020For the Month Ended December 31, 2020
Income from Continuing Operations before Income TaxNet Income / (Loss)Income Tax ExpenseApplicable Income TaxIncome from Continuing OperationsDiscontinued operationsLoss from impairment of assets of Discontinued operations, less Applicable Income Tax RecoveryIncome from Operations of the Discontinued Blue Division, less Applicable Income TaxApplicable Income Tax Recovery		$
Income Tax Expense Income from Continuing Operations Income from Operations of the Discontinued Blue Division, less Applicable Income Tax Loss from impairment of assets of Discontinued operations, less Applicable Income Tax Recovery Discontinued operations Applicable Income Tax Applicable Income Tax Recovery Net Income / (Loss) Income from Continuing Operations before Income Tax
Loss from impairment of assets of Discontinued operations, less Applicable Income Tax RecoveryIncome from Continuing Operations before Income TaxApplicable Income TaxIncome from Operations of the Discontinued Blue Division, less Applicable Income TaxDiscontinued operationsApplicable Income Tax RecoveryNet Income / (Loss)Income from Continuing OperationsIncome Tax Expense
Income from Operations of the Discontinued Blue Division, less Applicable Income TaxApplicable Income Tax RecoveryIncome Tax ExpenseNet Income / (Loss)Loss from impairment of assets of Discontinued operations, less Applicable Income Tax RecoveryIncome from Continuing Operations before Income TaxIncome from Continuing OperationsApplicable Income TaxDiscontinued operations
Discontinued operationsIncome from Operations of the Discontinued Blue Division, less Applicable Income TaxIncome from Continuing OperationsNet Income / (Loss)Income Tax ExpenseApplicable Income TaxLoss from impairment of assets of Discontinued operations, less Applicable Income Tax RecoveryIncome from Continuing Operations before Income TaxApplicable Income Tax Recovery	$
Income from Operations of the Discontinued Blue Division, less Applicable Income TaxNet Income / (Loss)Income from Continuing Operations before Income TaxApplicable Income TaxApplicable Income Tax RecoveryLoss from impairment of assets of Discontinued operations, less Applicable Income Tax RecoveryIncome from Continuing OperationsIncome Tax ExpenseDiscontinued operations

Income from Continuing Operations before Income TaxApplicable Income TaxIncome from Continuing OperationsIncome Tax ExpenseLoss from impairment of assets of Discontinued operations, less Applicable Income Tax RecoveryDiscontinued operationsIncome from Operations of the Discontinued Blue Division, less Applicable Income TaxApplicable Income Tax RecoveryNet Income / (Loss)