Reference no: EM132213944
Question - On November 30, 2017, MoBull Co. decided to dispose of a segment B. The sale was not complete at the end of 2017. During 2017, segment B generated operating income of $300,000. The historical cost of segment B is $1,000,000 and the Accumulated Depreciation on segment B at 12/31/17 is $400,000. At December 31, 2017, the fair value of segment B was estimated at $630,000 and the cost to sell segment B was estimated to be $10,000. MoBull Co. sold segment B on May 17, 2018 for $615,000. During 2018, segment B generated operating loss of $40,000. MoBull has a 30% tax rate in all years.
a) Provide the journal entry to record any impairment of Segment B in 2017. If no journal entry, justify why.
b) Provide the Discontinued Operations Section of the 2017 Multistep Income Statement. MoBull's common shares outstanding at the end of 2017 and 2018 were 525,000 and 475,000, respectively. In 2018, MoBull declared a preferred stock dividend of $100,000, but only paid $70,000 of the dividend in 2018. In 2018, MoBull declared a common stock dividend of $200,000 and paid $240,000.
c) Provide the 2018 Partial Income Statement, starting with Income from Continuing Operations of $1,000,000. Include the first four lines and EPS information. Good format is required.
d) Provide the journal entry to record the disposal of Segment B. GJEF is required.
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