In the 2009 Income Statement for Foxtrot Co

question 92

Multiple Choice

In the 2009 income statement for Foxtrot Co., it would report income from discontinued operations of:

• A)$ 9.2 million.
• B)$13.2 million.
• C)$ 22 million.
• D)$ 26 million.60% (i.e., 1 tax rate) $22 million ($32 million gain on asset sale $10 million operating loss)

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Definitions:

Net Income

The total earnings of a company after all expenses and taxes have been deducted from revenue.

Voting Shares

Shares of stock that grant the holder the right to vote on company matters at shareholders' meetings.

Acquisition

The process by which one company purchases most or all of another company's shares to gain control of that company.

New-entity Method

A consolidation method that treats the combined entities as a completely new reporting entity.