Reference no: EM133125041

Question - EcoPro Ltd. is a private company and has elected to follow ASPE. A statement of income for EcoPro Ltd. for the year ended December 31, 2021, follows.

EcoPro Ltd. Statement of Income For the year ended December 31, 2021

Sales revenue $7300000

Cost of goods sold 3700000

Gross profit 3600000

Selling, general, and administrative expenses 2300000

Income before income tax 1300000

Income tax expense 390000

Income before unusual item 910000

Loss from tornado (net of taxes) 630000

Net income 280000

In late 2021, EcoPro Ltd discontinued its apparel fabric division. But the above statement did not report the discontinued division appropriately. The loss on the disposal of this discontinued division amounted to $790000. The amount was included as part of selling, general, and administrative expenses in the statement. Before the disposal of this discontinued division, the division reported the following for 2020: sales revenue of $1.5 million; cost of goods sold of $750000; and selling, general, and administrative expenses of $580000. All of revenues and expenses from the discontinued division are included in the above statement.

Required - Prepare, in good form and with proper disclosure, a revised statement of income for EcoPro Ltd. The company has a 30% income tax rate.