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Rufina [12.5K]
3 years ago
7

Pascoreli Clothing is a clothing component of Lucha Libre, Inc. Pascoreli has been losing $35,000 per month since April 1 20X7.

On May 31, 20x8, Lucha Libre’s management committed to an immediate sale of Pascoreli. Management expects to find a buyer before March 31, 20x9. Lucha Libre has estimated Pascoreli’s net assets have a fair value $1,300,000 and the book value of the group’s assets is $1,700,000. Lucha Libre sold Pascoreli on April 30, 20x9 for $1,100,000. What amount if any would Lucha Libre report from discontinued operations before taxes for the year ended December 31, 20x8
Business
1 answer:
lora16 [44]3 years ago
5 0

Answer:

ZERO as the operations for Pascoreli continues. Lucha Libre considers Pascoreli Clothing a non.current asset held for sale which is a diferent accounting topic.

Explanation:

Lucha Libre did not stop the operations neither plans to stop them It wants to sale the division not to shut down therefore their result will impact net income directly rather than being discounued operations.

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Since the total property taxes for the year are $1,140, to find the property tax per month we have to divide by 12 ⇒ $1,140 / 12 = $95 per month

The seller is responsible for paying the property taxes during 3 months and 1 day, to find out the amount for that 1 day we divide the monthly tax by 30 = $3.17 per day.

the total seller's credit = ($95 x 3) + $3 = $285 + $3 = $288

*The seller's credit includes all the expenses that must be paid by the seller, while the seller's debit includes all the money that he receives.

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The following book and fair values were available for Westmont Company as of March 1.
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Answer:

DR Inventory                                        $609,000  

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     Customer Relationships                $842,250  

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CR Accounts Payable                                           $102,000  

       Common Stock                                                       $56,400

       Additional Paid-In Capital                                     $1,353,600

        Cash                                                                       $4,130,000

Working

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Additional Paid in Cap = 28,200 shares * ( 50 - 2) = $1,353,600

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DR Professional Services Expense                   $49,800

CR Cash                                                                                $49,800

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