Question & Answer: In discontinued operations: revenue is $19,210,000, COGS is $7,150,000, Depreciation Expense is $9,36…..

In discontinued operations: revenue is $19,210,000, COGS is $7,150,000, Depreciation Expense is $9,360,000, Income Tax Expense/(Benefit) is $550,800. If the company plans to sell this division by the end of 2016, with an expected sell price of $1,400,000 and legal fees for the sale of $200,000. The net carrying value of the division is $1,109,200. How do I figure out the discontinued operations section of the 2015 income statement if the division is not sold in 2015?

Expert Answer

 

Income from discontinued operation
Income/loss from operation of discontinued operation
Revenue 19,210,000
less:COGS -7,150,000
Depreciation expense -9,360,000
Income tax expense -550,800
Income from operation of discontinued operation 2,149,200
Gain/(loss)from sale of division
Net sale value [1,400,000-200,000] 1,200,000
less:net carrying value -1,109,200
Gain from sale of division 90,800
Total income from discontinued operation 2,240,000
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