Question

On June 30, 20X5, Mill Corp. incurred a $100,000 net loss from disposal of a business segment. Also, on June 30, 20X5, Mill paid $40,000 for property taxes assessed for the calendar year 20X5.
What amount of the foregoing items should be included in the determination of Mill's net income or loss for the six-month interim period ended June 30, 20X5?

a) $140,000
b) $120,000
c) $90,000
d) $70,000

Answer 1

Answer:

$120,000

Explanation:

Total amount for inclusion in determining Mill Corp's net income or loss is as follows.

• Net loss from disposal of business segment = $100,000
• Property tax for 6 months to June 30, 20x5= $40,000 * 0.5 = $20,000

Therefore, total amount for inclusion = $100,000 + $20,000 = $120,000.