On July 15, 2004 Ryan Services decided to sell its agricultural business and focus on its landscape equipment business. The sale of the agricultural business qualifies for discontinued operations accounting treatment. On November 11, 2004 Ryan Services signs a firm contract to sell the agricultural business to Alfalfa Inc. on March 10, 2005. For each of the situations listed discuss how Ryan Services would report the discontinued operations in its December 31, 2004 income statement. (You may disregard tax issues with respect to the sale.)
Situation 1: For the period January 1, 2004 to July 15, 2004 Ryan Services reports that the agricultural business lost $3.2M. From July 16, 2004 to November 11th, 2004 Ryan Services reports that the agricultural business loses an addition $1.4 million dollars. At the end of the 2004 Ryan estimates that it will lose an additional $800,000 on the sale of the agricultural business when it is finally completed in 2005.
Situation 2: For the period January 1, 2004 to July 15, 2004 Ryan Services reports that the agricultural business had a profit of $1.5M. From July 16, 2004 to November 11th, 2004 Ryan Services reports that the net income from the agricultural business was $600,000 dollars. At the end of the 2004 Ryan estimates that the sale of the agricultural business will result in a gain of $1.7 million dollars when it is finally completed in 2005.
Situation 3: For the period January 1, 2004 to July 15, 2004 Ryan Services reports that the agricultural business lost $3.2M. From July 16, 2004 to November 11th, 2004 Ryan Services reports that the agricultural business loses an addition $1 million dollars. However, at the end of the 2004 Ryan estimates that the sale of the agricultural business will result in a gain of $1.3 million dollars when it is finally completed in 2005.

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The Answer of On July 15, 2004 Ryan Services decided to sell its agricultural business and focus on its landscape equipment business. The sale of the agricultural business qualifies for discontinued operations accounting treatment. On November 11, 2004 Ryan Services signs a firm contract to sell the agricultural business to Alfalfa Inc. on March 10, 2005. For each of the situations listed discuss how Ryan Services would report the discontinued operations in its December 31, 2004 income statement. (You may disregard tax issues with respect to the sale.)
Situation 1: For the period January 1, 2004 to July 15, 2004 Ryan Services reports that the agricultural business lost $3.2M. From July 16, 2004 to November 11th, 2004 Ryan Services reports that the agricultural business loses an addition $1.4 million dollars. At the end of the 2004 Ryan estimates that it will lose an additional $800,000 on the sale of the agricultural business when it is finally completed in 2005.
Situation 2: For the period January 1, 2004 to July 15, 2004 Ryan Services reports that the agricultural business had a profit of $1.5M. From July 16, 2004 to November 11th, 2004 Ryan Services reports that the net income from the agricultural business was $600,000 dollars. At the end of the 2004 Ryan estimates that the sale of the agricultural business will result in a gain of $1.7 million dollars when it is finally completed in 2005.
Situation 3: For the period January 1, 2004 to July 15, 2004 Ryan Services reports that the agricultural business lost $3.2M. From July 16, 2004 to November 11th, 2004 Ryan Services reports that the agricultural business loses an addition $1 million dollars. However, at the end of the 2004 Ryan estimates that the sale of the agricultural business will result in a gain of $1.3 million dollars when it is finally completed in 2005.

On July 15, 2004 Ryan Services Decided to Sell Its