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This is focusing about Discontinued Operations!!! a. Guthrie Gourmet Foods Conglomerate has four divisions: Fruit, Vegetable, Meat, and Snack Foods. Because of the growing health
This is focusing about Discontinued Operations!!!
a. Guthrie Gourmet Foods Conglomerate has four divisions: Fruit, Vegetable, Meat, and Snack Foods. Because of the growing health craze, the snack food division has become unprofitable. The company has decided to discontinue it. The loss from operations for the year is $250,000; the income tax rate for Guthrie is 35%, and 75,000 shares of common stock are outstanding throughout the year. Assume that the segment was disposed of on December 10 of the current year. The assets were sold for $300,000 and had a book value of $150,000. Income from continuing operations (after income tax) was $325,000. Prepare an income statement starting with income from continuing operations for December 31 of the current year. b. Assume that the segment was available for sale at December 31 and that the above facts apply. Prepare an income statement starting with income from continuing operations for December 31 of the current year. c. Assume that the segment was available for sale at December 31 and the fair market value of the assets was $100,000. Prepare an income statement starting with income from continuing operations for December 31 of the current yearStep by Step Solution
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