Читать книгу Wiley GAAP: Financial Statement Disclosure Manual - Joanne M. Flood - Страница 24

The Hewitt Candy Company sells its entire candy cane production line, recognizing a gain of $155,000 on the transaction prior to applicable taxes of $54,000. During the year in which the sale was completed, Hewitt lost $23,000 on its operation of the candy cane line, while it also lost $72,000 during the preceding year. Applicable tax reductions during these years were $8,000 and $25,000, respectively. It reports these results in the following portion of its income statement:

	20X0	20X1
Discontinued operations:
Loss from operations of discontinued candy cane division (net of applicable taxes of $25,000 and $8,000)	$(47,000)	$(15,000)
Gain on disposal of candy cane division (net of applicable taxes of $54,000)	—	101,000

A clause in the sale agreement stipulates that Hewitt must reimburse the buyer for any maintenance problems found in the equipment. In the following year, the two parties negotiate a payment by Hewitt of $39,000 to address claims made under this clause. The applicable tax reduction associated with this payment is $14,000. It reports these results in the following portion of its income statement:

	20X0	20X1	20X2
Discontinued operations:
Loss from operations of discontinued candy cane division (net of applicable taxes of $25,000 and $8,000)	$(47,000)	$(15,000)	‐‐
Gain on disposal of candy cane division (net of applicable taxes of $54,000)	‐‐	101,000	‐‐
Adjustment to gain on disposal of candy cane division (net of applicable taxes of $14,000)	‐‐	‐‐	$(25,000)