Determine the net book value, Cost Accounting

Assignment Help:

NSC Ltd. has a 31 May fiscal year-end. NSC disposed of its Information Systems Group (ISG) on 31 January 20X3. ISG had a net loss (after taxes) of $37,700,000 in 20X3, to the date of disposal. The division was sold for $475,600,000 in cash plus future royalties through 31 May 20X4, which were guaranteed to be $30,000,000. The minimum guaranteed royalties were included in the computation of the 20X3 gain on the sale of the division. Actual royalties received in 20X4 were $35,500,000. Excerpts from comparative income statements found in the 31 May 20X4 financial statements are as follows:

($ millions) Year ended 31 May                                                                          20X4          20X3

Earnings (loss) from continuing operations                                                           $(29.3)       $(205.5)

Discontinued operations:

Gain on sale of discontinued operation (net of income taxes of $1.2 in 20X4 and $34.0 in 20X3)

                                                                                                                     4.3            182.3

Net income (loss)                                                                                            $(25.0)       $(23.2)

Required:

1.Determine the net book value of ISG at the date of disposal.

2.Why does NSC report a gain on the sale of the discontinued operation of $4,300,000 in the year ending 31 May 20X4?

3.NSC reports an after-tax loss from discontinued operations of $37,700,000 for the year ending 31 May 20X3. Over what period was the loss accrued?


Related Discussions:- Determine the net book value

Calculate the average cost, Seventeen new bathing suit stores enter the San...

Seventeen new bathing suit stores enter the Santa Barbara market, joining the seven that already existed. As a consequence, the demand schedule facing Swim N Style (and all other s

Group bonus plan, #question techniques of payment under group bonus plan ....

#question techniques of payment under group bonus plan .

Reasons for cost allocation, Reasons for Cost Allocation 1. To provide...

Reasons for Cost Allocation 1. To provide comparison along with externally provided services:  It helps in assessing where to continue the contact or service outsiders. 2.

Expenditure for the base period and the current period, 1. The table below ...

1. The table below gives data for Southland where there are three consumption goods: bananas, coconuts and grapes. Goods Quantity in base period basket

Statement of changes in working capital, A statement of changes in working ...

A statement of changes in working capital assists us in locating where such changes took place. In the first example we try to demonstrate the increase or decrease in particular it

Standard costing and variance analysis using kaizen costing, Discuss how SD...

Discuss how SD can use standard costing and variance analysis to prepare meaningful reports when using Kaizen Costing. By the use of standard costing and variance analysis, fr

Material sampling - analyszing direct materials cost, A. Material Sampling ...

A. Material Sampling -Analyzing Direct Material Costs You are reviewing a cost proposal, which includes an $800,200 direct material estimate. After Initial examination of the pro

Explain the principles of kaizen costing, SD manufactures and sells a small...

SD manufactures and sells a small range of timber based  products. The main differences b/w the products are their size and the type of timber they used. SD prepares annual budgets

Opportunity costs are relevant costs, Opportunity Costs Are Relevant Costs ...

Opportunity Costs Are Relevant Costs Opportunity cost introduces an additional concept that is not available like part of normal cost analysis in the accounting record system.

Cost sheet, what is a cost sheet? what are its advantages?

what is a cost sheet? what are its advantages?

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd