Instructions Chart of Accounts On November 1, 2019, Woods Company announced its plans to sell its subsidiary, Williams Division (a major strategic component of the company). By December 31, 2019, Woods had not sold Williams Division and so it classifies the division as held for sale. CHART OF ACCOUNTS Woods Company During 2019, Woods recorded the following revenues and expenses for Williams Division and the remainder of the company: General Ledger Williams Division Remainder of Company Sales revenue $170,000 $950,000 ASSETS REVENUE Cost of goods sold 119,000 560,000 111 Cash 411 Sales Revenue Operating expenses 42,000 190,000 121 Accounts Receivable 141 Inventory EXPENSES Woods is subject to a 30% income tax rate. 152 Prepaid Insurance 500 Cost of Goods Sold 181 Equipment 511 Insurance Expense On December 31, 2019, the net book value of Williams Division is $500,000, consisting of assets of S910,000 and liabilities of $410,000. On this date, Woods estimates that the fair value of Williams Division is $420,000. The company had 50,000 shares of common stock outstanding during all of 2019 189 Accumulated Depreciation 512 Utilities Expense 191 Assets of held-for-sale Williams Division 521 Salaries Expense 532 Bad Debt Expense Required: LIABILITIES 540 Interest Expense 1. Prepare the journal entry on December 31, 2019, to record the pretex loss on held-for-sale Williams Division. Show supporting 211 Accounts Payable 231 Salaries Payable 541 Depreciation Expense 559 Miscellaneous Expenses calculations 2. Prepare a 2019 multiple-step income statement for Woods. 250 Unearned Revenue 701 Loss on Write-Down of Held-for-Sale Williams 3. Show how Williams Division would be reported on Woods's December 31, 2019, balance sheet. Division 261 Income Taxes Payable 292 Liabilities of Held-for-Sale Williams Division 910 Income Tax Expense EQUITY 311 Common Stock 331 Retained Earnings Labels and Amount Descriptions General Journal Shaded cells have feedback. Labels Question not attempted. Current Assets PAGE 12 Current Liabilities GENERAL JOURNAL Score: 0/25 Other Assets DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT Other Liabilities Results from discontinued operations Amount Descriptions Gross profit Points: 015 Income from continuing operations Income from operations of discontinued Williams Division Supporting calculations: Income from write-down of held-for-sale Williams Division Loss from continuing operations The amount of the journal entry on December 31, 2019, to record the pretax loss on held-for-sale Williams Division is calculated as: Loss from operations of discontinued Williams Division book value of net assets less fair value of net assets of discontinued Williams Division Net income Net loss O book value of net assets of discontinued Williams Division Operating expenses O fair value of net asset of discontinued Williams Division Pretax income from continuing operations O income from operations of discontinued Williams Division Results from discontinued operations Income Statement Shaded cells have feedback. 2. Prepare a 2019 multiple-step income statement for Woods. Income Statement Instructions Question not attempted. Score: 0/83 WOODS COMPANY Income Statement For the Year Ended December 31, 2019 1 2 3 5 6 7 8 Label) 9 10 11 Balance Sheet Shaded cells have feedback 3. Show how Williams Division would be reported on Woods's December 31, 2019, balance sheet. Balance Sheet Instructions Question not attempted. WOODS COMPANY Score: 0/24 Partial Balance Sheet December 31, 2019 Assets Liabilities 2 Label) (Label) 3 Points 0/6
