On August 1,2014,Alpha Co.approved a plan to dispose of an unprofitable segment of its business.Alpha expected that the sale would occur on April 30,2015,at an estimated gain of $250,000.The segment had actual and estimated operating profits (losses)as follows:
$\begin{array}{lr}
\text { Realized loss from } 1 / 1 / 14 \text { to } 7 / 31 / 14 & (\$ 400,000) \
\text { Realized loss from } 8 / 1 / 14 \text { to } 12 / 31 / 14 & (250,000) \
\text { Expected loss from } 1 / 1 / 15 \text { to } 4 / 30 / 15 & (300,000)
\end{array}$
Assume Alpha's tax rate is 30%.
Required:
In its 2014 income statement,what should Alpha report as profit or loss from discontinued operations (net of tax effects)?

Question

On August 1,2014,Alpha Co.approved a plan to dispose of an unprofitable segment of its business.Alpha expected that the sale would occur on April 30,2015,at an estimated gain of $250,000.The segment had actual and estimated operating profits (losses)as follows:
$\begin{array}{lr}
\text { Realized loss from } 1 / 1 / 14 \text { to } 7 / 31 / 14 & (\$ 400,000) \
\text { Realized loss from } 8 / 1 / 14 \text { to } 12 / 31 / 14 & (250,000) \
\text { Expected loss from } 1 / 1 / 15 \text { to } 4 / 30 / 15 & (300,000)
\end{array}$ 
Assume Alpha's tax rate is 30%.
Required:
In its 2014 income statement,what should Alpha report as profit or loss from discontinued operations (net of tax effects)?

Quizplus · Accepted Answer

The Answer of On August 1,2014,Alpha Co.approved a plan to dispose of an unprofitable segment of its business.Alpha expected that the sale would occur on April 30,2015,at an estimated gain of $250,000.The segment had actual and estimated operating profits (losses)as follows:
$\begin{array}{lr}
\text { Realized loss from } 1 / 1 / 14 \text { to } 7 / 31 / 14 & (\$ 400,000) \
\text { Realized loss from } 8 / 1 / 14 \text { to } 12 / 31 / 14 & (250,000) \
\text { Expected loss from } 1 / 1 / 15 \text { to } 4 / 30 / 15 & (300,000)
\end{array}$ 
Assume Alpha's tax rate is 30%.
Required:
In its 2014 income statement,what should Alpha report as profit or loss from discontinued operations (net of tax effects)?

On August 1,2014,Alpha Co Assume Alpha's Tax Rate Is 30