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Required nr 2 only please. ****NR 2**** The following condensed income statements of the Jackson Holding...

Question:

Required nr 2 only please. ****NR 2****
The following condensed income statements of the Jackson Holding 2018 and 2017: Company are presented for the two years ended December 31, 2018 2017 Sales Cost of goods sold Groes profit operating expenses Operating income $16,600,000 $11,200,000 10,000,000 6,800,000 6, 600, 000 4,400,000 3,840,0003,240,000 2,760,000 1, 160,000 eain on ale of division,320,000 3,520,000 1,160,000 Income tax expense Net income 1.056,000348,000 2,464,000 S 812,000 On October 15, 2018, Jackson entered into a tentative agreement to sell the assets of one of its divisions. The division qualifies as a component of an entity as defined by GAAP The division was sold on December 31, 2018, for $5,480,000. Book value of the divisions assets was $4,720,000. The divisions contribution to Jacksons operating income before-tax for each year was as follows: 2018 $480,000 2017 $380,000 Assume an income tax rate of 30%. Required: (In each case, net any gain or loss on sale of division with annual income or loss from the division and show the tax effect on a separate line) 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 divisions assets on December 31 was $5,480,000. Prepare revised income statements according to generally accepted accounting
The following condensed income statements of the Jackson Holding 2018 and 2017: Company are presented for the two years ended December 31, 2018 2017 Sales Cost of goods sold Groes profit operating expenses Operating income $16,600,000 $11,200,000 10,000,000 6,800,000 6, 600, 000 4,400,000 3,840,0003,240,000 2,760,000 1, 160,000 eain on ale of division,320,000 3,520,000 1,160,000 Income tax expense Net income 1.056,000348,000 2,464,000 S 812,000 On October 15, 2018, Jackson entered into a tentative agreement to sell the assets of one of its divisions. The division qualifies as a component of an entity as defined by GAAP The division was sold on December 31, 2018, for $5,480,000. Book value of the division's assets was $4,720,000. The division's contribution to Jackson's operating income before-tax for each year was as follows: 2018 $480,000 2017 $380,000 Assume an income tax rate of 30%. Required: (In each case, net any gain or loss on sale of division with annual income or loss from the division and show the tax effect on a separate line) 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 $5,480,000. Prepare revised income statements according to generally accepted accounting

Answers

2)

Particular 2018 2017
Income from operation $2280000[$2760000(operating income) - $480000] $780000{$1160000(operating income) - $380000}
Income tax expense @ 30% $684000 $234000
Income from continuing operation (A) $1596000 $546000
Income from discontinued operations $480000 $380000
Income tax expense @ 30% $144000 $114000
Income from discontinued operation (B) $336000 $266000
Net income (A + B) $1932000 $812000

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