Zero Company had three business segments. Because Garson Segment had been operating at a pre-tax loss during Fiscal Year 2006, Zero accepted an offer to sell the net assets of Garson Segment, which had a carrying amount of $400,000 on October 31, 2006, the end of the fiscal year, to Thrice Company (an unrelated business enterprise) for $340,000 on November 30, 2006. Garson Segment was expected to operate at a loss (before income tax considerations) of $40,000 during the month of November, 2006. Zero's income tax rate is 40%.
Prepare a working paper to compute the loss on the disposal of Garson Segment to be displayed in Zero Company's income statement for the fiscal year ended October 31, 2006.

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The Answer of Zero Company had three business segments. Because Garson Segment had been operating at a pre-tax loss during Fiscal Year 2006, Zero accepted an offer to sell the net assets of Garson Segment, which had a carrying amount of $400,000 on October 31, 2006, the end of the fiscal year, to Thrice Company (an unrelated business enterprise) for $340,000 on November 30, 2006. Garson Segment was expected to operate at a loss (before income tax considerations) of $40,000 during the month of November, 2006. Zero's income tax rate is 40%.
Prepare a working paper to compute the loss on the disposal of Garson Segment to be displayed in Zero Company's income statement for the fiscal year ended October 31, 2006.

Zero Company Had Three Business Segments