Division incurred before-tax operating losses

Assignment Help Accounting Basics

Reference no: EM13127589

Chance Company had two operating divisions, one manufacturing farm equipment and the other office supplies. Both divisions are considered separate components as defined by generally accepted accounting principles. The farm equipment component had been unprofitable, and on September 1, 2011, the company adopted a plan to sell the assets of the division. The actual sale was effected on December 15, 2011, at a price of $600,000. The book value of the division's assets was $1,000,000, resulting in a before-tax loss of $400,000 on the sale.

The division incurred before-tax operating losses of $130,000 from the beginning of the year through December 15.

The income tax rate is 40%. Chance's after-tax income from its continuing operations is $350,000.

Reference no: EM13127589

Questions Cloud

How many grams of mg(no3)2 must be added : How many grams of Mg(NO3)2 (Mm=147 g/mol) must be added to 405 g of water to make a solution with a colligative molality of 0.125 m?

Compute the amount of net operating income or loss : Compute the amount of net operating income or loss under absorption costing based on the following data.

Explain how does this apply in the audit setting : Game theory "seeks to predict behavior based on an individual's best response given that individual's motivations and the individual's beliefs regarding the likely behavior" of others. A good example is the prisoner's dilemma. Explain how does th..

How the budgeting process employed by springfield : Discuss how the budgeting process employed by Springfield Corporation contributes to its failure to achieve the president's sales and profit targets.

Division incurred before-tax operating losses : The division incurred before-tax operating losses of $130,000 from the beginning of the year through December 15.

Probability that sample mean of iq scores will not differ : If 55 people are chosen at random, what is the probability that the sample mean of IQ scores will not differ from the population mean by more than 2 points?

What is the concentration of cl- : Three solutions 61.0 mL of 0.2 M KNO3; 63.0 mL of 0.3 M Ca(NO3)2; and 69.0 mL of 0.385 M KCl were poured together to make one new solution.

Outline of the three-step writing process : This is an outline of the three-step writing process to apply to all writing and cases. Address all aspects of writing a resume (or answering case questions) directly on this form. Then add a page break, and write your message in response to the resu..

Calculate earth company overhead application rate for total : the company incurred $340,000 actual overhead and 39,000 actual labor hours while producing 19,500 units. Calculate Earth Company's overhead application rate for total overhead.

User Account

All Pages