Discontinued Operations in Process
In 2008, Laetner Industries decided to discontinue its Laminating Division, a separately identifiable component of Laetner’s business. At December 31, Laetner’s year end, the division has not been completely sold. However, negotiations for the final and complete sale are progressing in a positive manner, and it is probable that the disposal will be completed within a year. Analysis of the records for the year disclosed the following relative to the Laminating Division.
|
Operating loss for the year |
$89,900 |
|
Loss on disposal of some Laminating Division assets during 2008 |
5,000 |
|
Expected operating loss in 2009 preceding final disposal |
45,000 |
|
Expected gain in 2009 on disposal of division |
20,000 |
Instructions:
Assuming a 35% tax rate, prepare the Discontinued Operations section of Laetner Industries’ income statement for the year ending December 31, 2008.