Question 1

Discontinued Operations Campbell Soup reported discontinued operations in its Form 10Q for the third quarter ended April 28, 2019. The company reported that, during the third quarter, it sold its Garden Fresh Gourmet business for approximately $50 million and also signed a definitive agreement for the sale of Bolthouse Farms for $464 million and expects to close the deal before July 2019. The company disclosed the following related to these discontinued operations ($ millions).

For the Nine Months Ended	April 28, 2019
Net sales	$606
Earnings (loss) from operations, after-tax	(254)
Loss on sale of businesses, net of tax	(47)
Loss from discontinued operations	$(301)

a. Which of the following best describes how Campbell Soup reported the Bolthouse transaction? i. Campbell Soup will report the Bolthouse unit as discontinued operations in the quarter in which the unit is formally sold. ii. Campbell Soup reported the Bolthouse unit as discontinued operations in the April 28, 2019, income statement even though the unit had not been formally sold by then. iii. Campbell Soup will retroactively report the Bolthouse unit as discontinued operations in the year in which the unit is formally sold. iv. Campbell Soup will prorate the effects of the Bolthouse unit sale (as discontinued operations) event among the fiscal quarters in year in which the unit is formally sold. Correct answer: Answeriiiiiiiv b. What amount of sales revenue did Campbell Soup earn from Garden Fresh Gourmet and Bolthouse for the first three quarters of fiscal 2019? $Answer million c. What amount of earnings did Campbell Soup report from Garden Fresh Gourmet and Bolthouse for the first three quarters of fiscal 2019? $Answer million d. What was the combined selling price for Garden Fresh Gourmet and Bolthouse Farms? $Answer million e. Ignoring tax effects, what is the approximate combined net book value of Garden Fresh Gourmet and Bolthouse Farms at the date of their respective disposals? $Answer million