Reference no: EM133021619
Question - The income statement for Jane Ltd., a private company reporting under ASPE, for the year ended December 31, 2020, is as follows: Sales $35,000,000 Cost of goods sold 20,000,000 Gross margin 15,000,000 Operating expenses 10,000,000 Operating income 5,000,000 Income taxes (30%) 1,500,000 Net income $ 3,500,000 At its November 2020 meeting, Warner Ltd.'s board of directors approved a decision to sell one of its three divisions: Division A. During 2020, Division A had revenues of $10,000,000, cost of goods sold of $7,000,000, and operating expenses of $4,000,000. These amounts are included in the income statement above. The carrying amount of the net assets of Division A is $18,000,000, and the fair market value of the net assets is $17,500,000. The costs to sell Division A are expected to be 7% of the fair value of the net assets. These amounts have NOT been taken into consideration in preparing the income statement above.
Required - Calculate the net income or loss from discontinued operations for Warner Ltd. for the year ended December 31, 2020.
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