Question

Reporting on Discontinued Operations—Disposal in Current Year

On August 1, 2020, Fischer Inc. decided to discontinue the operations of its Services Division, which qualifies as a business component. An agreement was formalized to sell this component for $436,800 cash. The book value of the assets of the Services Division was $504,000. The disposal date was August 1, 2020. The income tax rate is 25%, and the accounting year-end is December 31. On December 31, 2020, the pretax income from all operations, including an operating loss of $56,000 incurred by the Services Division prior to August 1, 2020, was $1,120,000. There were 150,000 weighted average common shares outstanding during 2020.

Required

Prepare a partial income statement beginning with income from continuing operations. Include the earnings per share disclosures.

• Use a negative sign to indicate a loss.
• Round the per share amounts to two decimal places.

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Discontinued operations
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Loss on disposal of discontinued component, net of tax savings				Answer
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Per share:
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Loss on disposal of discontinued component, net of tax savings				Answer
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Answer 1

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