Computation of Income from Discontinued Operations
Fleming Company has two divisions, E and N. Both qualify as business components. In 2008, the firm decides to dispose of the assets and liabilities of Division N; it is probable that the disposal will be completed early next year. The revenues and expenses of Fleming for 2007 and 2008 are as follows:
|
|
2008 |
2007 |
|
Sales—E |
$5,000 |
$4,600 |
|
Total nontax expenses—E |
4,400 |
4,100 |
|
Sales—N |
3,500 |
5,100 |
|
Total nontax expenses—N |
3,900 |
4,500 |
During the later part of 2008, Fleming disposed of a portion of Division N and recognized a pretax loss of $2,000 on the disposal. The income tax rate for Fleming Company is 30%. Prepare the 2008 comparative income statement.