Question
Please help me solve and fill out the sheets The following condensed income statements of the Jackson Holding Company are presented for the two years
Please help me solve and fill out the sheets
The following condensed income statements of the Jackson Holding Company are presented for the two years ended December 31, 2016 and 2015: |
2016 | 2015 | |||
Sales | $ | 15,600,000 | $ | 10,200,000 |
Cost of goods sold | 9,500,000 | 6,300,000 | ||
Gross profit | 6,100,000 | 3,900,000 | ||
Operating expenses | 3,440,000 | 2,840,000 | ||
Operating income | 2,660,000 | 1,060,000 | ||
Gain on sale of division | 660,000 | ? | ||
3,320,000 | 1,060,000 | |||
Income tax expense | 996,000 | 318,000 | ||
Net income | $ | 2,324,000 | $ | 742,000 |
On October 15, 2016, Jackson entered into a tentative agreement to sell the assets of one of its divisions. The division qualifies as a component of an entity as defined by GAAP. The division was sold on December 31, 2016, for $5,180,000. Book value of the division?s assets was $4,520,000. The division?s contribution to Jackson?s operating income before-tax for each year was as follows: |
2016 | $430,000 | loss |
2015 | $330,000 | loss |
Assume an income tax rate of 30%.
See attached files to continue |
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