Question

On June 30, Cheyenne Corp. discontinued its operations in Mexico. On September 1, Cheyenne disposed of the Mexico facility at a pretax loss of $625,000. The applicable tax rate is 28%. Show the discontinued operations section of Cheyenne’s statement of comprehensive income.

Answer 1

Answer:

net loss is : 450,000

tax = 625,000* 28%= 175,000

Explanation:

discontinued operation: in this case , gain or loss always be shown net of taxes in the income statement

total loss = 625,000

net taxes = 175,000

net loss= 625,000-175,000= 450,000