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ryzh [129]
3 years ago
8

Susan Inc. has been disappointed with the Willow Division's performance over the last few years and has decided that it would be

best to sell the division. As of December 31, 2019 the Willow divison is considered to be held for sale. The division's loss from operations for 2019 was $1,800,000. The division's book value and fair value less cost to sell on December 31 were $3,080,000 and $2,320,000, respectively. What should the company report as loss on discontinued operations (before tax) on its 2019 income statement
Business
1 answer:
labwork [276]3 years ago
3 0

Answer:

$2,560,000

Explanation:

impairment loss = division's book value - division's fair market value = $3,080,000 - $2,320,000 = $760,000

Assets held for sale are no longer depreciated, but they must be recorded at lower value between carrying cost and fair market value. Since the fair market value is lower than carrying value, then an impairment loss results.

loss on discontinued operations = loss from operations 2019 + impairment loss = $1,800,000 + $760,000 = $2,560,000

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Answer:

The answer is letter D.

Explanation:

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3 years ago
Managers should avoid satisficing in the ____ stage of the managerial decision-making process.
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7 0
3 years ago
​Valley, Inc. has​ 9,000 shares of preferred stock outstanding. The preferred stock has a​ $90 par​ value, a​ 14% dividend​ rate
EastWind [94]

Answer:

The dividends payout to preferred stockholders is $113,400 as shown below.

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The total dividends payable to holders of preferred shares can be computed thus:

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The same way they also have precedence in the distribution of company's assets before ordinary shareholders upon the liquidation of the company.

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8 0
3 years ago
Hich pricing strategy involves setting a high price for an exclusive, high-end product?
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3 0
3 years ago
In a new margin account, a customer buys 300 shares of ABC at $40 per share, 100 shares of the Ajax Mutual Fund at $24, and 10 P
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3 years ago
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