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On September 1, 2018, Jacob Furniture Mart enters into a tentative agreement to sell the assets of its office equipment division. This division qualifies as
On September 1, 2018, Jacob Furniture Mart enters into a tentative agreement to sell the assets of its office equipment division. This division qualifies as a component of the entity according to GAAP regarding discontinued operations. The division's contribution to Jacob's operating income for 2018 was a $3 million loss before taxes. Jacob has an average tax rate of 30%. Scenario 3: Assume that Jacob had not yet sold the office furniture division by the end of 2018. Further , assume that the folr value less costs to sell of the division's assets at December 31, 2018, was $12 million and was expected to remain the same when the assets are sold in 2019. The book value of the division's assets was $19 million at the end of the year. Required: Under these assumptions, what would Jacob report in its 2018 income statement regarding the office equipment division? (Enter your answer in millions rounded to 1 decimal place (.e., 5,500,000 should be entered as 5.5).) Lots from discontinued operations million
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