Question:
Refer to the situation described in BE 4–8. Assume instead that the estimated fair value of the segment’s
assets, less costs to sell, on December 31 was $7 million rather than $10 million. Prepare the lower
portion of the 2013 income statement beginning with pretax income from continuing operations. Ignore
EPS disclosures.
Answer:
CALIFORNIA MICROTECH CORPORATION
Partial Income Statement
For the Year Ended December 31, 2013
Income from continuing operations before income taxes............................ $ 5,800,000
Income tax expense* ................................................................................... 1,740,000
Income from continuing operations ............................................................ $ 4,060,000
Discontinued operations:
Loss from operations of discontinued component
(including impairment loss of $1,000,000)** ......................................... (4,600,000)
Income tax benefit .................................................................................... 1,380,000
Loss on discontinued operations ............................................................... (3,220,000
Net income .................................................................................................. $ 840,000
* $5,800,000 x 30%
** Loss from operations of discontinued component:
Refer to the situation described in BE 4–8. Assume instead that the estimated fair value of the segment’s
assets, less costs to sell, on December 31 was $7 million rather than $10 million. Prepare the lower
portion of the 2013 income statement beginning with pretax income from continuing operations. Ignore
EPS disclosures.
Answer:
CALIFORNIA MICROTECH CORPORATION
Partial Income Statement
For the Year Ended December 31, 2013
Income from continuing operations before income taxes............................ $ 5,800,000
Income tax expense* ................................................................................... 1,740,000
Income from continuing operations ............................................................ $ 4,060,000
Discontinued operations:
Loss from operations of discontinued component
(including impairment loss of $1,000,000)** ......................................... (4,600,000)
Income tax benefit .................................................................................... 1,380,000
Loss on discontinued operations ............................................................... (3,220,000
Net income .................................................................................................. $ 840,000
* $5,800,000 x 30%
** Loss from operations of discontinued component:
