Question

On November 1, 2021, Jamison Inc. adopted a plan to discontinue its barge division, which qualifies as a separate component of the business according to GAAP regarding discontinued operations. The disposal of the division was expected to be concluded by April 30, 2022. On December 31, 2021, the company's year-end, the following information relative to the discontinued division was accumulated: Operating loss Jan. 1–Dec. 31, 2021 $ 78 million Estimated operating losses, Jan. 1 to April 30, 2022 97 million Excess of fair value, less costs to sell, over book value at Dec. 31, 2021 17 million In its income statement for the year ended December 31, 2021, Jamison would report a before-tax loss on discontinued operations of: Multiple Choice $61 million. $158 million. $175 million. $78 million.

Answer 1

Answer:

$78 million

Explanation:

Data given in the question

Operating loss = $78 million

Estimated operating loss = $97 million

Excess of fair value, less costs to sell, over book value = $17 million

So, by considering the above information, the before-tax loss on discontinued operations is $78 million because the fair value is exceeded from the book value i.e $17 million. Moreover, the asset is also not impaired. So only operating loss would be reported