Question

The semiconductor business of the California Microtech Corporation qualifies as a component of the entity according to GAAP. The book value of the assets of the segment was $8 million. The loss from operations of the segment during 2021 was $3.6 million. Pretax income from continuing operations for the year totaled $5.8 million. The income tax rate is 25%. The estimated fair value of the segment's assets, less costs to sell, on December 31 was $7 million. Prepare the lower porti

Answer 1

Net Income = $1,650,000

Step-by-step explanation:

"The missing question is Prepare the lower portion of the 2021 income statement beginning with income from continuing operations before income taxes. Ignore EPS disclosures. (Amounts to be deducted and negative amounts should be indicated with a minus sign"

California Micro-tech Corporation

Partial Income Statement

For the year ended December 31, 2021

Income from continuing operation $5,800,000

before Income taxes

- Income tax expenses $1,450,000

($5,800,000 * 25%)

Income from Continuing Operation A $4,350,000

Discontinued Operations

- Loss from operation discontinued $3,600,000

component

Income tax benefit $900,000

($3,600,000 * 25%)

Loss on discontinued operation B - $2,700,000 -$2,700,000

Net Income (A + B) $1,650,000