On October 15, 2021, Jackson entered into a tentative agreement to sell the assets of one of its divisions. The division qualifi
es as a component of an entity as defined by GAAP. The division was sold on December 31, 2021, for $5,180,000. Book value of the division’s assets was $4,520,000. The division’s contribution to Jackson’s operating income before-tax for each year was as follows: 2021 $430,000 2020 $330,000
1. Prepare revised income statements according to generally accepted accounting principles, beginning with income from continuing operations before income taxes. Ignore EPS disclosures.
2. Assume that by December 31, 2018, the division had not yet been sold but was considered held for sale. The fair value of the division’s assets on December 31 was $5,180,000. Prepare revised income statements according to generally accepted accounting principles, beginning with income from continuing operations before income taxes. Ignore EPS disclosures.
3. Assume that by December 31, 2018, the division had not yet been sold but was considered held for sale. The fair value of the division’s assets on December 31 was $3,960,000. Prepare revised income statements according to generally accepted accounting principles, beginning with income from continuing operations before income taxes. Ignore EPS disclosures.
