Question
On September 1, 2017, Pebble Inc. approved a plan to dispose of a segment of its business. Pebble expected that the sale would occur on
On September 1, 2017, Pebble Inc. approved a plan to dispose of a segment of its business. Pebble expected that the sale would occur on March 31, 2018, at an estimated gain of $350,000. The segment had actual and estimated operating profits (losses as follows):
Realized loss from 1/1/17 to 8/31/17 | $(300,000) |
Realized loss from 9/1/17 to 12/31/17 | (200,000) |
Expected profit from 1/1/18 to 3/31/18 | 400,000 |
Assume a marginal tax rate of 20%. In its 2017 income statement, what should Pebble report as profit or loss from discontinued operations (net of tax effects)?
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