The following condensed profit or loss statement of Sasume Corporation is presented for two years ended December 31, 2024 and 2023: 2024 2023 Net sales 10,000,000 9,000,000 Cost of sales 6,000,000 6,000,000 Gross profit 4,000,000 3,000,000 Operating expenses 2,500,000 2,000,000 Gain on sale of a component 900,000 -- Total 2,400,000 1,000,000 Income tax expense 720,000 300,000 Net income 1,680,000 700,000 On January 1, 2024, Sasume entered into an agreement to sell for P2,000,000 one of its separate operating divisions. The sale resulted in a gain on disposition of P900,000 on November 14, 2024, and qualifies as a discontinued component. This division’s contribution to Sasume’s reported income before income taxes for each year was as follows 2024 P700,000 loss 2023 P400,000 loss Assume an income tax rate of 30%. In preparation of a revised comparative profit or loss, what is the amount to be reported report under the caption “discontinued operations” for 2024?
The following condensed profit or loss statement of Sasume Corporation is presented for two years ended December 31, 2024 and 2023:
|
|
2024 |
2023 |
|
Net sales |
10,000,000 |
9,000,000 |
|
Cost of sales |
6,000,000 |
6,000,000 |
|
Gross profit |
4,000,000 |
3,000,000 |
|
Operating expenses |
2,500,000 |
2,000,000 |
|
Gain on sale of a component |
900,000 |
-- |
|
Total |
2,400,000 |
1,000,000 |
|
Income tax expense |
720,000 |
300,000 |
|
Net income |
1,680,000 |
700,000 |
On January 1, 2024, Sasume entered into an agreement to sell for P2,000,000 one of its separate operating divisions. The sale resulted in a gain on disposition of P900,000 on November 14, 2024, and qualifies as a discontinued component. This division’s contribution to Sasume’s reported income before income taxes for each year was as follows
|
2024 |
P700,000 loss |
|
2023 |
P400,000 loss |
Assume an income tax rate of 30%. In preparation of a revised comparative profit or loss, what is the amount to be reported report under the caption “discontinued operations” for 2024?
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
