Question
Mary Jones Inc. reported $179 million in operating income for the year ended December 31, 2011. This income included a gain from the sale of
Mary Jones Inc. reported $179 million in operating income for the year ended December 31, 2011. This income included a gain from the sale of the Mary Jones family of brands to AR Samuels for a total of $285 million. At the time of disposal, the brands had a book value of zero because they had been developed in-house by Mary Jones. Shortly after the sale, in January 2012, the company changed its name to the Evergreen & Florence Companies to reflect the sale of its Mary Jones brands. For the year ended December 28, 2013, Evergreen & Florence reported an operating income of $90.9 million, after deducting the following asset impairment losses: Juicy Couture brand impairment loss $2.9 million Loss due to impairment of the TRIFARI 4 brand, 6 million Mexx impairment loss 6.6 million Total impairment losses $14.1 million a. Determine the profit per sale that Mary Jones reported in 2011 when she divested her brands. (Enter your answer in millions.)
Juicy Couture brand impairment loss | ps | 2.9 | million | ||
Loss due to impairment of the TRIFARI brand | 4.6 | million | |||
Mexx impairment loss | 6.6 | million | |||
Total impairment losses | ps | 14.1 | million | ||
a. | Determine the profit per sale that Mary Jones reported in 2011 when she divested her brands. (Enter your answer in millions.) |
b. | What would have been the company's operating income (loss) for this year if it had not sold its Mary Jones brands? (Enter your answer in millions.) |
C. | Determine the operating income that Evergreen & Florence would have reported in 2013 if its impairment losses had been zero. (Enter your answer in millions.) |
d. | What percentage of operating income (before impairment) did the 2013 impairment losses represent? (Round percentage values to 1 decimal place.) |
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a Sale proceeds of brand names A 2850 m Book value at the time of sale B 0 m Gain on sale of bra...Get Instant Access to Expert-Tailored Solutions
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