Question:
Refer to the situation described in BE 4–7. Assume that the semiconductor segment was not sold during
2013 but was held for sale at year-end. The estimated fair value of the segment’s assets, less costs to sell,
on December 31 was $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** ............................... (3,600,000)
Income tax benefit .................................................................................... 1,080,000
Loss on discontinued operations ............................................................... (2,520,000
Net income .................................................................................................. $ 1,540,000
* $5,800,000 x 30%
** Includes only the loss from operations. There is no impairment loss.
Refer to the situation described in BE 4–7. Assume that the semiconductor segment was not sold during
2013 but was held for sale at year-end. The estimated fair value of the segment’s assets, less costs to sell,
on December 31 was $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** ............................... (3,600,000)
Income tax benefit .................................................................................... 1,080,000
Loss on discontinued operations ............................................................... (2,520,000
Net income .................................................................................................. $ 1,540,000
* $5,800,000 x 30%
** Includes only the loss from operations. There is no impairment loss.
