Prepare revised income statement according to gaap

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Reference no: EM131285470

On October 15,2016,Jackson entered into a tentative agreement to sell assets of one its division. The division qualifies as a component of an entity as defined by GAAP. the division was sold on December 31,2016, for 5,000,000. Book vallue of the division was 4,400,000. The division contribution to Jackson operating income before tax for each year was as follows:

2016      400000 was loss

2015.     300000 was loss

Assume income tax rate of 40%

Required:

1. prepare revised income statement according to GAAP, beginning with income from continuing operations before income taxes. Ignore EPS disclosurrd.

2. Assume that by Decrmber 31, 2016 the division had not yet been sold but was condidered held for sale. The fair value of the division assets on decembet 31 was 5,000,000. How would the prepresentation of discontinued operation be different from your answer to requirement 1.

Reference no: EM131285470

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