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Determine to prepare partial income statement

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Point 1: On October 5, 2020, Diamond in the Blue Spruce Group Inc.'s board of directors decided to dispose of the Blue Division. A formal plan was approved. Diamond derives approximately 79% of its income from its human resources management practice. The Blue Division gets contracts to perform human resources management on an outsourced basis. The board decided to dispose of the division because of unfavourable operating results.

Point 2: Net income for Diamond was $93,450 for the fiscal year ended December 31, 2020 (after a charge for tax at 30%). Income from operations of the Blue Division accounted for $5,250 (after tax) of this amount.

Point 3: Due to unfavourable results and the extreme competition, the board believes that it cannot sell the business intact. Its final decision is to auction off the office equipment. The equipment is the division's only asset and has a carrying value of $24,000 at October 5, 2020. The board believes that proceeds from the sale will be approximately $4,000 after the auction expenses. Currently, the equipment's estimated fair value is $6,400. The Blue Division qualifies for treatment as a discontinued operation.

Question 1: To prepare partial income statement, beginning with income from continuing operations before income tax, under ASPE

Reference no: EM132472802

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