Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The partial statement of comprehensive income for Quesley Inc. (Quesley), a publicly accountable entity, for the year ended June 30, 2021, is as follows: Revenue

image text in transcribed

The partial statement of comprehensive income for Quesley Inc. (Quesley), a publicly accountable entity, for the year ended June 30, 2021, is as follows: Revenue $7,800,000 Cost of goods sold 4,500,000 Gross margin 3,300,000 Operating expenses 2,750,000 Operating income 550,000 Income taxes (30%) 165,000 Net income (loss) $385.000 During April 2021, the board of directors of Quesley approved the sale of Echo, one of Quesley's divisions and major lines of business. Operations at Echo ceased on June 1, 2021, at which point the assets of Echo qualified as held for sale, and Echo was put on the market for sale at a price of $8,500,000. It was expected that a buyer would be found to purchase Echo within the next 12 months. For the fiscal year from July 1, 2020, to June 30, 2021, Echo had revenues of $4,000,000, a gross margin of $1,000,000, and operating expenses of $900,000. These amounts are included in the partial statement of comprehensive income above. The carrying value of the net assets of Echo was $9,200,000, and the fair market value of the net assets was estimated to be $8,700,000. Costs to sell Echo were estimated to be equal to 8% of the fair value of Echo's net assets. These amounts are NOT included in the partial statement of comprehensive income above. Required: a) Determine the amount of net income or loss from discontinued operations for the year ended June 30, 2021. (3 marks) b) Determine the amount of income or loss from continuing operations for the year ended June 30, 2021

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting For Decision Makers

Authors: DeFond, Mark

3rd Edition

1618534432, 9781618534439

More Books

Students also viewed these Accounting questions

Question

=+What do you want them to know?

Answered: 1 week ago

Question

=+1. How can you animate it?

Answered: 1 week ago