please answer in detail and correctNeed assistance with B- It's not 75k On October 31, Leigh Corp. approved a formal plan to dispose of its Knit Products Division. On December 31, the KnitProducts Division was held for sale but had not been sold. The Knit Products Division (considered a separate businesscomponent) reported a net loss from operations of $505,000 before tax for the year ended December 31. The Knit ProductsDivision has a book value and fair value (after selling expenses) of $3,600,000 and $3,300,000, respectively. Leigh Corp.reported income from continuing operations of $900,000 before tax for the year.a. Assuming an income tax rate of 25%, prepare an income statement beginning with Income from Continuing Operations.Ignore earnings per share disclosures.• Use a negative sign to indicate a loss.Leigh Corp.Income StatementYear Ended December 31Income from continuing operationsDiscontinued operationsLoss from discontinued operations, net of tax savingsImpairment loss on discontinued component, net of tax savingsNet incomeLeigh Corp.Income StatementYear Ended December 31SIncome from continuing operationsDiscontinued operationsLoss from discontinued operations, net of tax savingsGain on discontinued component, net of taxNet income675,000b. Repeat the requirements of part a but now assume that the book value of the Knit Products Division is $3,200,000 onDecember 31.• Use a negative sign to indicate a loss.(378,750)(225,000)$ 71,250$ 675,000(378,750)75,000 x$ 371,250 x

Introduction: The income statement summarises a company's financial results over a specific time…

b. Repeat the requirements of part a but now assume that the book value of the Knit Products Division is $3,200,000 on December 31. • Use a negative sign to indicate a loss. Leigh Corp. Income Statement Year Ended December 31 Income from continuing operations Discontinued operations Loss from discontinued operations, net of tax savings Gain on discontinued component, net of tax Net income S 675,000 (378,750) 75,000 x S 371,250 x

b. Repeat the requirements of part a but now assume that the book value of the Knit Products Division is $3,200,000 on December 31. • Use a negative sign to indicate a loss. Leigh Corp. Income Statement Year Ended December 31 Income from continuing operations Discontinued operations Loss from discontinued operations, net of tax savings Gain on discontinued component, net of tax Net income S 675,000 (378,750) 75,000 x S 371,250 x

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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